India's wealthiest families are becoming the lender instead of the shareholder

By Strota Newsroom · 2026-09-24 · How Strota reports

On 8 October, the Economic Times will hold the second edition of its Alpha Wealth Summit in Mumbai, and the subject is a shift that has been building for three years: where India's largest private fortunes put their money once stocks and bonds stop being the whole answer.

The short answer, according to the Julius Baer and EY study published in August 2026 under the title Indian family office playbook: Now, next and beyond, is alternatives. The report found that 40 to 45 per cent of allocations in many family offices now go into private equity, venture capital, private credit, alternative investment funds, real estate investment trusts and infrastructure investment trusts.

The same report projects family office assets growing 1.5 times over the next three years, from approximately 700 billion rupees, or 7.1 billion dollars, in 2024. It puts India's wider alternative asset market at 400 billion dollars, of which 156 billion dollars sits in SEBI-registered alternative investment funds, and cites an estimate that the market could exceed 2 trillion dollars by 2034.

Two asset classes sit at the centre of that move. One is private credit, which is money lent directly to companies by funds rather than by banks. In India these funds are mostly structured as Category II alternative investment funds, and they negotiate terms privately with each borrower instead of pricing a loan off a published benchmark.

The borrowers are usually companies that do not fit the template a bank is built to process: mid-market firms with real assets and uneven cash flows, promoters funding a stake purchase, and developers or infrastructure builders with a long gap between spending and revenue. Moody's Ratings described borrowing by real estate and infrastructure companies, along with promoter financing across sectors, as the main drivers of the market.

Private credit has doubled over five years to about 25 billion dollars in assets under management at the end of 2025, and Moody's said maintaining that trajectory would take the market to roughly 50 billion dollars by 2030. Most transactions are currently smaller than 100 million dollars, and the multi-billion dollar deals remain sporadic and are largely used to refinance.

The yield is the reason families are interested. S&P Global figures cited in market research put Indian private credit yields at 14 to 22 per cent, against 8 to 10 per cent for bank lending and 10 to 13 per cent for finance companies. That spread is not free money. It pays for illiquidity, for bespoke and sometimes complex structures, and for instruments that are typically unlisted and unrated, which means the fund manager's judgement is doing the work that a rating agency would otherwise do.

The second asset class is venture debt, which lends to startups that have already raised equity and want to grow without selling more of the company. Trifecta Capital has deployed over 7,200 crore rupees across more than 180 startups. Stride Ventures has enabled over 13,300 crore rupees of credit globally and launched its fourth fund targeting a corpus of 2,500 crore rupees.

The competitive backdrop is changing at the same time. The Reserve Bank of India's acquisition financing guidelines took effect in July 2026, and Moody's said they are expected to increase competition in a market historically dominated by alternative capital. That expands the opportunity in one direction and squeezes the pricing power that produced those yields in the other.

Deal flow in 2026 has been thinner than the long-run trend. EY reported that private credit deals dropped 61 per cent to 3.5 billion dollars in the first half of 2026, with domestic funds leading nearly three-fourths of the deployments. The financings that did close show the scale the market can reach: GMR Group raised nearly 1 billion dollars from private credit investors, the Adani Group issued 750 million dollars of bonds, and funds managed by Apollo fully subscribed a 500 million dollar investment in senior secured notes backed by transmission assets of Adani Energy Solutions.

Part of the appeal is arithmetic. The Julius Baer and EY report notes that debt instruments offer limited scope for returns, which has pushed families toward private credit, private equity and global opportunities. For a family whose operating business is already concentrated in one industry, lending to a company in a different one produces income that does not move with its own fortunes.

It is also a change in the family's role. Buying shares makes a family a price-taker in someone else's company. Lending directly, or committing to a fund that does, makes it the party setting the terms, with covenants and collateral attached to the money. The report describes families increasingly acting as long-term private capital providers rather than passive holders of assets.

What the numbers establish is the direction and the size of the shift. A larger share of a growing pool of family wealth is going into private markets, and the private credit market has doubled in five years to about 25 billion dollars. What they do not establish is the return. The 14 to 22 per cent range describes yields available in the market, not outcomes achieved, and the asset class asks an investor to accept years of illiquidity on the strength of one manager's reading of an unlisted borrower. That is the trade the summit in Mumbai will be discussing on 8 October.

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