Overseas real estate helps in diversification of portfolio, says Himanshu Kohli of Client Associates
High Net Worth Individuals (HNIs) in 2024, the significance of diversification through international real estate, and the increasing focus on Environment, Social, and Governance (ESG) compliant investments. One of the key trends we have been observing in the HNI landscape is that while clients' needs have not gone up that much, their balance sheets have expanded, meaning their assets have increased. This, in turn, implies that the surplus wealth also has increased and, as a result, there will be a bias toward growth-oriented portfolios, and here we are referring to more allocation into public markets, private markets, and international markets.
The second trend is that systematic investments will continue, and in fact, they will increase over some time. Thirdly, the financialization of savings will continue to be the game changer, and investments into equities as a mainstream asset class will continue. Besides equity, investors will also look at higher allocation towards alternate asset classes.
As for international exposure, the UHNIs and HNIs will continue to increase their allocation to global portfolios, aiming to diversify beyond India and as a Plan B option. At the balance sheet level, this segment of clients will revisit their asset allocation, and they may want to relook at their business wealth, property portfolios, and financial assets. This will help them determine an asset allocation based on the balance sheet rather than the recency bias, where markets have done very well, leading to investors' greed.
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