Global diversification takes centre stage as Gulf Indian wealth enters a generational transition

Wealthy Gulf-based Indians are shifting beyond property and family businesses into global liquid assets, while renewed optimism on India is driving fresh interest in equities and alternatives Wealthy Indian expatriates in the Gulf are increasingly diversifying away from portfolios dominated by family businesses and real estate, allocating more capital to global liquid assets, private equity and international markets as younger generations reshape wealth management priorities. The shift marks a significant evolution in how Gulf-based non-resident Indians (NRIs) build and preserve wealth. While first-generation entrepreneurs in the UAE accumulated fortunes primarily through businesses and property investments, wealth managers say many families are now reassessing asset allocations amid changing market conditions and succession planning considerations. “Dubai-based NRIs are majority first-generation wealth creators,” said Kunal Sumaya, Managing Director and Global Head of Julius Baer’s NRI business. “A lot of wealth has traditionally gone back into businesses and growing them. What came later was allocation to real estate, which then became one of the biggest asset classes on their balance sheet.” According to Sumaya, traditional NRI wealth in the Gulf remains heavily concentrated in operating businesses and property, but recent market volatility has prompted many families to review their long-term investment strategies. “What we do see with the current situation is that everybody is looking at a pause, a reset and a reflection of how asset allocation will play out in the mid-term,” he said. “Diversification is a clear trend. I would not say away from where they are, but more into liquid global markets.” The move towards globally diversified portfolios is also being accelerated by the next generation of wealthy Indian families, many of whom have different investment preferences from their parents. “The interest of the next generation has always been to move from fixed assets to liquid and from local to global,” Sumaya said. “This is accelerating the conversation. It was something that would have happened as the next generation took over, but now you’re definitely looking at more liquid and global allocations.” The trend is visible both among long-established Gulf Indian business families and newer migrants arriving from international financial centres. According to Sumaya, increasingly mobile wealthy Indians who relocate to the UAE often retain investments in their countries of origin while building fresh exposure in the Gulf, creating naturally more international portfolios. India nevertheless remains a critical component of NRI wealth allocation strategies. Sumaya said overseas Indians continue to view India primarily as an equity investment story rather than a fixed-income opportunity. “India is a very equity-heavy market,” he said. “The allocation to Indian debt is very minimal. It remains largely an equity-driven theme.” After a period of caution triggered by rupee depreciation and concerns over global economic growth, demand for Indian assets is beginning to revive. A strong pipeline of initial public offerings is also helping restore investor interest. “Last year there was a bit of a pause with NRIs investing, but you can see some of that coming back now,” Sumaya said. “Large IPOs always drive interest, and there is a stream of them lining up.” Beyond listed equities, affluent NRIs are increasingly seeking alternative routes into India’s growth story. Private equity funds, venture capital opportunities and real estate investment trusts are attracting greater attention as investors look for diversification and access to high-growth sectors. “What we saw in recent years is allocation to private equity, venture capital and through REITs. That has also unlocked value in India,” Sumaya said. Another trend gaining momentum is the monetisation of traditional family-owned businesses. As younger generations show less interest in managing conventional manufacturing and trading companies, many families are selling stakes or partnering with private equity investors. “A lot of equity release from old family businesses is taking place,” Sumaya said. “This has created a lot of liquidity in the Indian market.” As a result, wealthy Indian families are increasingly looking offshore for diversification opportunities. “Conversations are increasingly around how do I allocate part of this liquid wealth offshore,” he said. “Diversification plays a big role.” Despite the growing preference for global diversification, investment strategists remain optimistic about India’s medium-term outlook. Rupen Rajguru, Head of Equity Investment & Strategy at Julius Baer India, said India’s recent market underperformance may have created attractive opportunities for investors. “Following India’s sharp underperformance in FY26 and record FPI outflows, a favourable base has likely been set for Indian equities,” Rajguru said. He believes corporate earnings will remain a key driver of returns over the next several years. “The earnings outlook has strengthened meaningfully, with corporate earnings expected to clock approximately 12-13 per cent CAGR over FY26-28, despite temporary pressure in 1QFY27,” Rajguru said. “Against this backdrop of stabilising earnings, we believe that Indian markets appear poised for a better performance in FY27.” Rajguru identified banking and financial services, consumption, building materials and select capital goods companies as preferred investment themes, while also highlighting opportunities in sectors benefiting from industry consolidation. “Our preferred themes include BFSI, consumption, building materials and select capital goods,” he said. “Additionally, we also see opportunities in sectors where competitive intensity is easing or the sector is witnessing consolidation, including telecom, aviation, hospitals and cement.” He added that geopolitical developments, particularly tensions involving Iran, the US and Israel and their potential impact on oil prices, remain important risks to watch, alongside ongoing disruptions in the IT services sector. Looking ahead, Rajguru remains constructive on Indian equities despite near-term uncertainties. “Overall, we remain constructive on Indian equity markets, driven by earnings cycle and domestic liquidity, coupled with the likely comeback of FPI flows,” he said. For NRI families, another challenge lies in succession planning. Yet Sumaya argues that regulatory obstacles are no longer the primary concern. “The tools are available. You have trust structures, foundations and living wills,” he said. “Businesses have started moving, but the wealth is still slow to move.” (Khaleej Times)