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Alternative Investment Funds (AIFs) have collectively invested ₹73,903 crore in India’s real estate sector as of December 2024, making it the top sector for AIF funding, according to property consultant Anarock.
This amount accounts for 15% of the total ₹5,06,196 crore invested across various sectors by AIFs.
Anarock compiled data from the Securities and Exchange Board of India (Sebi), highlighting the pivotal role AIFs are playing in shaping India’s real estate financing landscape.
AIFs are privately pooled investment vehicles set up in India that gather capital from high-net-worth individuals (HNIs) and institutional investors, both domestic and foreign, for investment in non-traditional assets, including private equity, hedge funds, and real estate.
Sector-Wise Breakdown Of AIF Investments
While real estate attracted the largest share of AIF investments, other sectors also saw significant funding. AIFs invested:
- ₹30,279 crore in IT/ITeS
- ₹26,807 crore in financial services
- ₹21,929 crore in Non-Banking Financial Companies (NBFCs)
- ₹21,273 crore in banks
- ₹18,309 crore in the pharmaceutical sector
- ₹12,743 crore in FMCG
- ₹11,550 crore in retail
- ₹11,433 crore in renewable energy
The remaining ₹2,77,970 crore was distributed across various other sectors.
AIFs Redefine Real Estate Financing
Anarock emphasised the transformative role AIFs have played in real estate funding, especially for projects struggling with limited access to traditional capital.
“The rise of AIFs has significantly transformed real estate financing in India, offering a crucial lifeline to projects struggling with a lack of funding and unlocking new opportunities for developers,” the firm noted.
Prashant Thakur, Regional Director and Head of Research at Anarock Group, highlighted the adaptability of AIFs.
“Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development,” he said.
He also predicted further innovation, “Going forward, the adoption of blended finance models, AI-driven risk assessments, and streamlined regulatory frameworks will maximise the impact of AIFs further.”
Rapid Growth Of AIFs In Decade
AIFs have witnessed exponential growth over the past decade.
The number of active AIFs surged from 42 in March 2013 to 1,524 as of March 5, 2025—a 36-fold increase.
Since 2019, the total commitment raised by AIFs has also grown five times, underscoring their rising influence.
Real Estate Viewed As Financial Product
Binitha Dalal, Founder and Managing Director of Mumbai-based Mt K Kapital, noted the shift in investor mindset.
“Real estate’s continued dominance in AIF allocations is a natural outcome of how investors are rethinking their portfolios,” she said. “Real assets are now being approached as part of financial portfolios, not just physical holdings.”
She added that the emergence of new fund structures tailored to varied risk-return profiles clearly indicates the market’s growing depth and sophistication.
AIFs Open New Avenues For Developers
Ankur Jalan, CEO of Golden Growth Fund, emphasised that AIFs have become a crucial investment channel for both institutional investors and HNIs.
“They’ve expanded funding options for developers, thanks to the flexibility and innovation AIFs bring,” he said.
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