In a significant shift of capital flows within the Indian investment landscape, the real estate sector has emerged as the top recipient of Alternate Investment Fund (AIF) investments, attracting a remarkable ₹74,000 crore in the first nine months of FY2025, according to the latest ANAROCK Research Report 2025.
Backed by SEBI data, the report reveals that real estate accounted for 15% of total cumulative net AIF investments, with ₹73,903 crore invested in the sector out of a total ₹5,06,196 crore across all industries. This marks a strong 8% growth in real estate AIF investments from ₹68,540 crore at the end of FY2024, showcasing the sector’s steady upward trajectory.
This surge reinforces the growing preference of institutional and high-net-worth investors for real estate as an asset class amid a tightening of traditional funding sources like banks and NBFCs.
AIFs are privately pooled investment vehicles that cater to sophisticated investors looking for exposure to high-risk, high-reward opportunities outside the traditional markets. These include private equity, hedge funds, and more prominently now—real estate.
"AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development. They pool capital from both domestic and global investors, creating a sustainable and scalable funding ecosystem," said Prashant Thakur, Regional Director & Head – Research, ANAROCK Group.
Looking ahead, the report forecasts the integration of blended finance models, AI-powered risk assessment tools, and more streamlined regulatory frameworks, all of which are expected to enhance the impact and efficiency of AIFs in the real estate space.
The Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund, India’s flagship AIF, has played a crucial role in this momentum by injecting over ₹35,000 crore into the real estate sector. Focused on reviving stalled housing projects, the SWAMIH Fund has been instrumental in bringing liquidity and hope to both developers and homebuyers.
"SWAMIH has facilitated the completion of thousands of housing units, offering much-needed relief to homebuyers and stability to the market," noted Anuj Puri, Chairman of ANAROCK Group. However, he cautioned that the fund continues to face several structural and regulatory hurdles in its mission.
While real estate led the pack, other sectors that saw considerable AIF inflows include IT/ITeS, financial services, NBFCs, banks, pharmaceuticals, FMCG, retail, and renewable energy. However, none matched the consistent and accelerating growth seen in real estate investments.
With traditional funding sources facing increasing limitations, Alternate Investment Funds have stepped up as a crucial capital channel for India’s real estate sector. Their ability to provide flexible, long-term capital has not only kept projects alive but is also reshaping the real estate financing ecosystem.
As real estate continues to command investor confidence, 2025 is poised to be a defining year for AIFs and their impact on India’s housing and infrastructure story.
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