A range of alternative investments be REITs, InvITs, Private Equity (PE) or venture capital funds (VCF), have been on offer among instruments available. Are these instruments finding favour with the investment community?
Investment experts feel that the demand for alternative investment is picking up. “Investment in alternative assets is picking up because of the favorable regulatory framework. Some initiatives like listing of InvITs, RERA and sovereign gold funds have made it easy for even mass affluent to access such investments and reap the benefits of diversification,” Vikash Agarwal, Co-founder CAGRfunds.
“Of late we have seen increased demand for other alternative investments such as art, crypto currency and InvIT,” says Agrawal. He retail investors taking exposure to REITs through mutual fund as and when available. “Retail investors can take some exposure towards REITs through mutual funds as some schemes have changed their investment mandate to allocate 10 percent towards these instruments,” he said.
Alternative assets offer a wide range of possibilities starting from wine, art real estate, real estate investment trusts (REITs), infrastructure investment trust (InvIT), currencies, coins and one of the most common investments for Indians – Gold.
Tanuj Khosla, Chapter Executive, Chartered Alternative Investment Analyst (CAIA) Association, feels that there will be increased action under alternative assets in India in coming days. “The pace of inflows in India-focused alternative investment funds be it venture capital, hedge funds or private equity has never been better in my time in the markets. Fund houses have raised billions of dollars from Japan, US & Europe to deploy in India,”
Khosla feels that the growth is driven among others by the returns generated by existing PE funds. “The inflows have been mostly driven by (a) their bullish view on Modi and the structural changes he is expected to unleash in the years to come (b) relatively attractive bond and stock market (although it has now gotten quite expensive in my personal view) in the country (c) demonstration of good returns by some Private Equity funds (with vintage of around 6-8 years) and some India-focused long/short equity hedge funds,” he said.
Khosla says asset managers should have dedicated investment specialist on alternative investments. “I would suggest separate ‘Alternative Investment’ department within the Investment team staffed with people who have the right experience and expertise in this field,” Khosla said.