Is Fractional Ownership the Right Alternative Investment For You?

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You must already be well aware of how the alternative investment landscape in India has transformed over the last few years. Traditional investments are, and always have been the first steps for wealth accumulation in the history of investing.

But we are now beginning to see how alternative investment platforms are slowly taking over the game and staking their place as the optimal investment pathway for wealth creation and portfolio growth.

Navigating alternative investments in India can be confusing in the beginning, as can deciding how to select the best investment for you. In this guide, we’ll cover what are alternative investments, and whether fractional ownership of real estate, a game changer in the alternative investment industry, is a worthwhile investment.

What Are Alternative Investments?

Traditional investments involve investing in stocks, bonds, gold, and so on. Alternative investments are broader in scope and encompass a number of different and new investment pathways. These include but are not limited to:

  • Fractional Ownership
  • Private Equity
  • Real Estate
  • Hedge Funds
  • Cryptocurrency

One key aspect in which alternative investments differ from traditional investments is in how they offer more potential for diversification compared to traditional assets in India by making investors

Alternative assets also have much less correlation with traditional investments, making them less vulnerable to market volatilities.

Important Characteristics of Alternative Investments

  • Potential for Higher Returns: Alternative investments, like fractional ownership, come with higher projected Internal Rates of Return (IRR), and the potential of significantly higher returns than traditional investments, making them particularly attractive for portfolio diversification.
  • Flexible Liquidity: Some alternative investments (not all), offer much more flexibility in terms of liquidity than other assets. Some investments however might require you to lock in your money for a longer period of time, depending on the nature of the investment, such as 5-7 years.
  • Less Regulation: Regulation for some alternative investments are much less clear than traditional investments. For example, cryptocurrency.

For others, such as fractional ownership for example, there is regulation. SEBI recently took fractional ownership under its umbrella by adding fractional ownership of real estate to its REITs (Real Estate Investment Trusts) Regulations, 2014 amendment, and thus giving it institutional backing.

How Big is the Alternative Investments Market in India?

In 2023, per a report from SG Analytics, the alternative investments market in India was worth around $90 billion, including a number of alternative investments such as private equity, alternative real estate, venture capital, and so on. As per the Economic Times, it is expected that by 2026, alternative investments will represent 20% of India’s total AUM (Assets Under Management).

In fact, if the speed of investment continues and remains favourable, the alternative investment industry in India, including both PMS (Portfolio Management Services) and Alternative Investment Funds (AIF), could grow to Rs 43.64 lakh crore by 2028, based on a report by Business Standard.

A number of factors are responsible for this growth: The wealth of Indian households has increased, more and more people are preferring alternative investments over traditional ones such as mutual funds, and there have been regulatory changes which have made it easier and more accessible for a large number of investors to enter the alternative investment industry.

Now we’ll look at one thriving alternative investment, fractional ownership of real estate in India.

How to Invest in Fractional Ownership

Fractional ownership of real estate in India is an investment that is equally compelling as it is lucrative. Fractional ownership makes it easier for investors to invest in luxury assets which might have been particularly difficult for them earlier owing to high prices of grade A commercial and luxury properties.

Through fractional ownership or co-ownership, investors can own a share in these high end commercial properties by pooling their money with other investors. Thus, the total ownership cost is divided, and each investor gets an equitable share in the premium asset or property.

Fractional ownership allows investors to own premium assets without much hassle, as it also brings in other investors on board in a way where the risks and profits are equally divided.

This investment model is facilitated by alternative investment platforms known as fractional ownership platforms, or FOPs (such as Assetmonk). They provide investors with the opportunity to explore a wide variety of premium grade A properties, which can be either commercial or in the luxury home space.

Assetmonk specialises in fractional ownership of commercial real estate, and invites investors to invest in high end commercial assets with a minimum entry ticket of Rs 25 lakhs.

How Big is the Fractional Ownership Real Estate Market in India?

The fractional ownership market in India is expected to reach $8.9 billion in 2025, as per data from Knight Frank. A huge portion of fractional ownership investments flowing into commercial real estate, and also the housing sector.

Talking about fractional ownership of commercial real estate in particular, the JLL India Real Estate Market report for Q3 projected substantial office space absorption of about 45 million sq. feet in 2024. This has easily surpassed the previous high ceiling set in 2023.

Is Fractional Ownership the Right Alternative Investment for You?

Here are some characteristics of fractional ownership of real estate that make it an attractive alternative investment:

  • Diversification: By investing in fractional ownership of real estate, you can diversify your investment portfolio by dividing your shares in multiple properties through fractional ownership. Ultimately, fractional ownership allows you to mitigate and spread risk, while simultaneously providing increased returns through premium commercial property investment.
  • Liquidity: Fractional ownership of real estate investments offer more liquidity. Investors can sell their ownership shares whenever they want, which is easier than looking for potential buyers for the entire property.
  • High Returns: Fractional ownership, especially in commercial real estate, can provide higher potential returns as compared to investing in the housing sector or traditional assets. Industry experts provide potential returns of 8-14% on fractional ownership investments, based on the opportunity you choose to invest in.

Invest with Assetmonk

Like the name suggests, alternative investments represent a departure from the conventional. Alternative investments may not be for everyone, but are they the right choice for you? This is where we come in.

Assetmonk is a unique player in the real estate alternative investment space By marrying the stability of conventional real estate investments with alternative financial investments, we have constructed an innovative bridge between traditional property investment and contemporary wealth management strategies.

Assetmonk provides a web-based dynamic alternative investment platform, it empowers investors to own stakes in high-value commercial properties, opening up opportunities for them in real estate investments with significantly lower entry barriers.

In doing so; we present investors with a unique avenue for growth by putting them in pole position for reaping off of their financial investments. 

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