Key Takeaways
- • Rahul Jain, President & Head of Nuvama Wealth Management, said at the ET Alpha Wealth Summit 2.0 in October 2026 that alternatives are becoming essential for wealth creation beyond stocks and bonds.
- • Jain identified defence, engineering and artificial intelligence as sectors where emerging companies may become significant businesses, with private markets offering access before they reach listed markets.
- • Jain recommended investing in startups and private equity through AIFs rather than directly, citing fund managers' superior ability to evaluate opportunities and structure investments.
- • Jain suggested allocating around 20-30% of the fixed-income portfolio to private credit and 10-15% of the equity portion to global equities, while cautioning about limited liquidity and longer holding periods.
- • Jain stressed that investors should evaluate risk first, then return, then tax, warning against choosing investments primarily for tax savings.
Summary
Alternative investments are becoming an increasingly important part of wealth creation as investors look beyond traditional stocks and bonds for access to emerging businesses, differentiated opportunities and potentially higher returns, according to Rahul Jain, President & Head of Nuvama Wealth Management. Speaking at the ET Alpha Wealth Summit 2.0 in October 2026, during a panel titled 'Following Smart Money', Jain said alternatives should be viewed as a vehicle for accessing equity and fixed-income opportunities that may not be available in listed markets.
Jain highlighted private markets, alternative investment funds (AIFs), private credit, special situations, REITs and InvITs as avenues for diversification. He said private markets could be particularly relevant for sectors still evolving and not yet well represented in listed markets, citing defence, engineering and artificial intelligence as examples. He also said private markets could offer attractive entry valuations relative to public markets in certain cases, though each opportunity should be assessed on its merits.
On private equity and startups, Jain argued that investing through professionally managed AIFs can be preferable to direct investment, as fund managers are better placed to evaluate businesses, assess risks, structure investments and understand shareholder rights. He acknowledged the risks of alternatives, including limited liquidity and longer investment horizons.
In fixed income, Jain identified private credit, special situations, infrastructure investments, REITs and InvITs, including pre-REIT and pre-InvIT opportunities, as options for diversifying allocations. He suggested investors could consider allocating around 20-30% of their fixed-income portfolio to private credit, depending on circumstances and risk appetite, and said private credit and special situations are similar in nature despite often being presented as distinct categories. He cautioned that the enhanced yields these strategies may offer must be weighed against borrower risk, deal structure and liquidity constraints.
On international investing, Jain said global equities could form part of an Indian investor's portfolio, noting that Indian equities had delivered subdued returns over the preceding two to three years while global equities appeared expensive at the time. He recommended around 10-15% of the equity portion be allocated to global equities, using a mix of emerging markets, passive and actively managed strategies.
Jain emphasised disciplined portfolio construction, quoting: "We always tell clients: first comes risk, then returns, and then tax." He warned that investors often prioritise tax benefits without adequately weighing risk. He concluded that alternatives are not substitutes for a well-diversified traditional portfolio, and that the key question is whether their complexity, liquidity constraints and risks are justified by their role in the overall portfolio.
Jain highlighted private markets, alternative investment funds (AIFs), private credit, special situations, REITs and InvITs as avenues for diversification. He said private markets could be particularly relevant for sectors still evolving and not yet well represented in listed markets, citing defence, engineering and artificial intelligence as examples. He also said private markets could offer attractive entry valuations relative to public markets in certain cases, though each opportunity should be assessed on its merits.
On private equity and startups, Jain argued that investing through professionally managed AIFs can be preferable to direct investment, as fund managers are better placed to evaluate businesses, assess risks, structure investments and understand shareholder rights. He acknowledged the risks of alternatives, including limited liquidity and longer investment horizons.
In fixed income, Jain identified private credit, special situations, infrastructure investments, REITs and InvITs, including pre-REIT and pre-InvIT opportunities, as options for diversifying allocations. He suggested investors could consider allocating around 20-30% of their fixed-income portfolio to private credit, depending on circumstances and risk appetite, and said private credit and special situations are similar in nature despite often being presented as distinct categories. He cautioned that the enhanced yields these strategies may offer must be weighed against borrower risk, deal structure and liquidity constraints.
On international investing, Jain said global equities could form part of an Indian investor's portfolio, noting that Indian equities had delivered subdued returns over the preceding two to three years while global equities appeared expensive at the time. He recommended around 10-15% of the equity portion be allocated to global equities, using a mix of emerging markets, passive and actively managed strategies.
Jain emphasised disciplined portfolio construction, quoting: "We always tell clients: first comes risk, then returns, and then tax." He warned that investors often prioritise tax benefits without adequately weighing risk. He concluded that alternatives are not substitutes for a well-diversified traditional portfolio, and that the key question is whether their complexity, liquidity constraints and risks are justified by their role in the overall portfolio.
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