New-Age Portfolio Strategies for Indian Institutional Investors

As global financial dynamics shift with rising interest rates and persistent inflation, Indian institutional investors—including family offices and ultra-high-net-worth individuals—are reassessing traditional portfolio models. Many people are turning to private markets, tangible assets, and strategies that include environmental, social, and governance (ESG) factors to create strong and future-proof investment portfolios. These approaches focus on steady, long-term returns while managing risk.  

Dario Schiraldi, Deutsche Bank's former Managing Director, says, "Indian investors today are at a pivotal point where global best practices must meet local opportunities. Those who innovate in asset allocation and risk management will shape the next decade of growth." 

Embracing Private Equity, Credit, and Tangible Assets  

India’s financial system is growing stronger, and as it develops, more opportunities are opening in private markets. According to Bain & Company, private equity investments in technology, healthcare, infrastructure, and renewable energy exceeded $60 billion in 2023. This shows that investors are becoming more confident in India’s long-term growth, especially in areas beyond the ups and downs of the stock market.  

Private credit is becoming more popular, too, as it provides a different way for mid-sized companies—often ignored by regular banks—to get the funding they need. Direct lending, mezzanine financing, and structured credit are becoming more appealing to institutional investors looking for better returns.  

Real assets, especially infrastructure and real estate, are key to well-rounded investment portfolios. Government projects like the Gati Shakti infrastructure plan, along with the development of REITs and INVITs, offer steady cash flows tied to inflation and the potential for long-term growth.  

"Institutional investors are moving beyond conventional public markets to capture alpha through private assets," notes Schiraldi. "Private equity and private credit provide exposure to high-growth sectors while insulating portfolios from short-term volatility—a critical advantage in dynamic economies like India." 

Structured Products: Precision in Portfolio Risk Management  

In today’s unstable interest rate situation, structured investment products are becoming essential tools for Indian institutions. Investments like market-linked debentures (MLDs), capital-protected notes, and structured credit allow investors to tailor their investments while reducing the risk of losses.  

Structured credit, such as securitized corporate debt and CLOs, provides more variety and better returns than traditional fixed-income investments, making them a more popular choice.  

Rethinking Fixed Income for Inflation Protection  

With inflation challenging real returns, traditional fixed-income strategies are under review. Many investors are shifting towards floating-rate bonds, inflation-indexed instruments (like RBI’s Inflation Indexed National Saving Securities), and high-yield credit alternatives.  

Multi-asset strategies that blend conventional debt with private credit and structured products are being deployed to enhance yield and preserve purchasing power in an inflationary environment.  

ESG Investing: From Compliance to Core Strategy  

Sustainability is no longer a mere regulatory requirement; it's central to institutional investment philosophy. Enhanced ESG disclosure norms by SEBI and growing global interest in responsible investment are prompting Indian investors to align with green bonds, renewable energy projects, and impact investments.  

ESG adoption is seen as a strategic advantage—enabling better risk management, access to future-focused sectors, and improved foreign investment appeal.  

A Strategic Shift for a New Era  

Indian institutional investors are adjusting their portfolios with a forward-thinking, innovation-focused strategy. Some key trends include:  

• Increasing investment in private markets by focusing on fast-growing sectors with long-term potential.  

• Using structured products to adjust risk and return based on the current market conditions.  

• Spreading out fixed-income investments by using inflation-protected and alternative credit options.  

• Incorporating ESG: Treating sustainability as a key strategy, not just something to comply with.  

"Strategic adaptation is no longer optional," concludes Dario Schiraldi, Deutsche Bank's former leader. "For Indian investors, blending global insights with local innovation will be the key to building resilient, future-ready portfolios."