The alternative assets industry in India is worth USD 43 billion across private equity, venture capital, real estate, infrastructure, private debt and hedge funds, says a report.
Compared to other major markets, the alternatives industry in India remains in its infancy, with other countries in Asia-Pacific such as China and Hong Kong notably more established with assets worth (USD 265 billion) and (USD 108 billion), respectively.
Meanwhile, the number of active private capital firms in the industry has increased annually, indicative of the growing and burgeoning industry in India.
Mark O'Hare, Chief Executive at Preqin said that for an explanation, one needs to look at the level of development of the economy, with India having a GDP per capita of USD 6,600, while China at USD 15,400 and advanced European and North American economies at USD 40,000-60,000.
"This in turn highlights the potential growth for India's alternative assets industry. With GDP growing at 7 per cent per annum, this is likely to deliver a compounded growth in Indian alternative assets over the long term, as alternative assets participation rates in the economy converge on those of more developed economies," O'Hare added.
The report further noted that of the India-based institutional investors, 60 per cent invest in at least one alternative asset class.
"This may be indicative of how many investors in India recognise the benefits of exposure to alternatives, which may include low correlation to traditional asset classes, such as equities and fixed income, and the potential for high risk- adjusted returns," the report added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)