India’s ultra high-networth individuals (UHNIs), who form the core of alternative investment funds (AIFs), increased their exposure to real estate by over 80 percent in FY26, latest data released by Sebi shows.

The cumulative AIF investments into real estate rose from Rs 70,000 crore in FY25 to Rs 1.28 lakh crore in FY26. Further, AIFs invested Rs 1.4 lakh crore in various sectors, of which 42 percent, or 60,000 crore, went into real estate, data shows, according to a report by Moneycontrol.

Overall AIF investments rose 25 percent in FY26 — from Rs 5.38 lakh crore to Rs 6.76 lakh crore.

AIFs are specialised investment funds for ultra-wealthy individuals with a minimum investment corpus of Rs 1 crore. Unlike mutual funds, these funds offer investment flexibility with easier compliance norms.  AIFs invest in both listed and unlisted shares and can also make both debt and equity investments.

Market experts say choppy FY26 markets is the reason for AIFs going big on real estate. In FY26, the benchmark Sensex lost 5.2 percent amid global uncertainties, notably the  Trump tariffs and the  West Asia war.

Real estate sector continued to remain buoyant with good urban demand. Generally, AIFs invest in real estate through the debt route which offers fixed income.

“Equity markets were turbulent through much of the year, and HNI and family office investors, who form the core AIF base, were actively seeking yield-bearing, hard-asset backed opportunities rather than chasing public market volatility,” said Tanvi Kanchan, associate director, Anand Rathi Shares & Stock Brokers.

“Real estate offered exactly that combination. Residential demand remained resilient across top-tier cities, commercial absorption, particularly in Grade A office and data centre segments was strong, and structured credit to developers offered predictable cash flows at attractive spreads.”

In overall exposure, real estate is the largest sector, with 19 percent of AIF investments directed toward it. Financial services is the second largest sector followed by information technology(IT), data shows.

“In real estate, the sector has undergone a significant transformation over the last few years. Consolidation in favour of branded developers, stronger residential demand, healthier balance sheets and better project execution have substantially improved the risk-reward equation. At the same time, traditional sources of funding for developers remain constrained, creating an attractive opportunity for AIFs to provide structured capital at compelling risk-adjusted returns,” said Bhavesh Shah, MD & Head of Investment Banking, Equirus Capital.

AIF investments in the financial services sector, too, saw a huge rise. Total investments in the sector surged 140 percent to Rs 65,000 crore in FY26. Financial services largely comprise non-banking companies engaged in financial services such as stock broking, insurance and so on. Fintech companies, too, fall under the financial services sector.