Real Estate Shines as AIF Investment Favorite in FY25 Surge

The Rise of Real Estate in India's Alternative Investment Landscape

In a fiscal year marked by shifting capital priorities and strategic financial bets, India’s real estate sector has emerged as the crown jewel for Alternative Investment Funds (AIFs), securing the largest share of capital inflows.

According to the latest ANAROCK Research report compiled using SEBI data, AIFs pumped nearly ₹74,000 crore into real estate in the first nine months of FY2025—claiming 15% of total investments across sectors. This marks a steady rise from ₹68,540 crore at FY2024-end to ₹73,903 crore by December 2024—an impressive 8% uptick in just three quarters.

AIFs: Agile Capital for High-Impact Sectors

For the uninitiated, Alternative Investment Funds are privately pooled vehicles that channel funds into non-traditional avenues like private equity, real estate, and hedge funds. Known for their high-risk, high-reward potential, AIFs cater primarily to experienced, institutional, or high-net-worth investors seeking diversified, scalable investment opportunities.

Amid tightening credit from conventional banks and NBFCs, AIFs have become agile financial instruments—bridging capital gaps and unlocking projects that would otherwise remain stalled.

SWAMIH Fund: A Lifeline for Stalled Homes

Driving a significant portion of this investment revolution is the government-backed SWAMIH Fund, India's flagship AIF initiative. With over ₹35,000 crore in liquidity infusion to date, the fund has breathed life into numerous stalled housing developments, directly benefiting thousands of homebuyers.

“The SWAMIH Fund has been an unmitigated boon for homebuyers across India. It has played a stabilizing role in the real estate market, even amid deep-rooted challenges,” said Anuj Puri, Chairman of ANAROCK Group.

However, the fund’s mission is not without its battles.

Puri emphasized the need for systemic reforms to unlock its full potential. “Beyond capital, what the sector needs are structural fixes: streamlined regulations, lender cooperation, and sustainable cash flow models,” he added.

Looking Ahead: The Future of AIFs in Real Estate

The future of real estate investment in India is likely to be shaped by blended finance, AI-driven risk assessment, and regulatory modernization. AIFs, pooling capital from both domestic and foreign sources, are poised to become a scalable and sustainable funding framework for developers navigating increasingly complex financial terrain.

“AIFs are more than just capital pools—they are transformative instruments that can bridge the financing gap in India’s evolving real estate ecosystem,” said Prashant Thakur, Regional Director and Head – Research at ANAROCK.

Other Sectors in the Spotlight

While real estate dominates, other sectors like IT/ITeS, financial services, NBFCs, banks, FMCG, and renewable energy are also seeing significant AIF activity, as investors look for returns in emerging and undercapitalized industries.

Final Thoughts

India’s real estate journey with AIFs is just beginning. As frameworks mature and funds like SWAMIH continue their mission, this partnership between private capital and public intent holds the potential to reshape urban landscapes—and more importantly—deliver long-overdue homes to millions.