Indian HNIs are moving beyond traditional concentrations in real estate, businesses, fixed income and direct equities as wealth management becomes increasingly portfolio-driven.
Ashwin Patni, Head of Wealth Management Solutions at Julius Baer India, discusses how wealthy investors are approaching alternatives, structured products and global assets — and why portfolio construction matters more than simply adding new products.
Q1: How is the asset allocation of Indian HNIs evolving?
Ashwin Patni: Indian HNIs are gradually moving from product-led investing to portfolio-led investing. Earlier, wealth was often concentrated in real estate, fixed income, direct equities and business interests. Today, investors are increasingly looking at mutual funds, PMS, AIFs, private markets and global assets as components of an overall portfolio.
The biggest shift is the growing acceptance of alternatives and international investments as strategic allocations rather than merely tactical opportunities.
However, many HNI portfolios remain heavily linked to the Indian economy through businesses, real estate and financial assets. There is still scope for greater allocation to global assets, private credit and strategies that offer genuinely differentiated sources of return.
The objective should not be to own more products, but to build portfolios with multiple return drivers and less dependence on a single market or asset class.
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Q2: What role should alternatives play in a wealthy investor's portfolio?
Patni: Alternatives should be viewed as portfolio-construction tools rather than simply return enhancers. Their value lies in introducing exposures that may behave differently from traditional equity and fixed-income markets.
I typically think of portfolios through a core-satellite framework. Public equities and fixed income form the core, while alternatives are added for specific objectives. Private equity can provide long-term growth, private credit can generate income, and certain real-asset strategies can provide exposure to inflation-sensitive assets.
The important question is whether an alternative investment improves the portfolio's overall risk-adjusted outcome. Investors should consider liquidity, investment horizon, manager quality and the underlying risks.
Q3: What makes a structured product genuinely useful?
Patni: A structured product is useful when it solves a specific portfolio need that cannot be addressed efficiently through a conventional investment. It can provide enhanced income, defined downside protection or participation in a particular market view.
Investors need to understand what risk is being transferred and what risk is being retained, including the underlying exposure, issuer credit risk, liquidity and tenure.
There is no free lunch in investing. Greater protection or enhanced income usually involves a trade-off elsewhere.
Complexity is another important consideration. Products involving multiple conditions, barriers or derivative payoffs can be difficult for investors to understand. Differences in distributor economics can also create potential conflicts of interest.
A structured product should ultimately be evaluated on whether the investor genuinely understands the risks being taken to achieve the desired payoff.
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Q4: Why should Indian HNIs increase global allocation?
Patni: The objective is both access to new opportunities and diversification, but reducing concentration risk is perhaps the most important.
Many Indian HNIs already have significant exposure to India through their businesses, careers, real estate and domestic financial investments. Global allocation can help balance that concentration.
International markets also provide access to sectors and companies that have limited representation in India, particularly technology, healthcare innovation and advanced manufacturing.
Global investing should not simply be viewed as a tactical call on one country versus another or purely as a currency trade. It is fundamentally about building a more balanced portfolio.
Q5: How significant could GIFT City become for Indian HNIs?
Patni: GIFT City has the potential to become an important pillar of Indian wealth management by providing a regulated platform through which investors can access international opportunities while remaining connected to an Indian financial ecosystem.
However, adoption is still evolving. Access to products is not yet as broad or seamless as in established international financial centres, and the customer onboarding and investment process can still involve friction.
For GIFT City to become mainstream, three things are particularly important: deeper product breadth, greater institutional participation and a more frictionless investor experience. Investor awareness and confidence will also need to improve.
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