Healthcare Property Syndication: Your Shield Against AIF Surge

June 24, 2025

High-net-worth individuals (HNWIs) are increasingly turning to Alternative Investment Funds (AIFs), with a 32% rise in allocations by March 2025, driven by market volatility and economic uncertainty. This shift prioritises diversification, inflation protection, and expert management. Healthcare property syndication, particularly with NHS-backed leases, offers transparency, stability, and reliable income, making it an attractive option. Despite economic concerns, 77% of HNWIs plan to increase UK property investments, highlighting the sector’s resilience and appeal as a defensive asset class.

The 32% AIF Surge: Why HNWIs Are Seeking Alternative Investments

As market volatility intensifies and global macroeconomic conditions shift, high-net-worth individuals are dramatically changing their investment strategies. Recent data reveals a staggering 32% increase in Alternative Investment Fund (AIF) allocations through March 2025 [1]. This remarkable surge signals a fundamental transformation in how wealthy investors are approaching portfolio construction—moving away from traditional equity-debt combinations in search of more resilient investment vehicles.

This shift isn’t merely a temporary adjustment but rather a strategic response to deepening concerns about market stability. AIFs—encompassing private equity, hedge funds, real assets, and private credit—are increasingly attractive precisely because they offer higher returns and stability during periods of market stress [1]. Investment advisors attribute this dramatic increase to three primary factors: diversification benefits, inflation hedging capabilities, and access to expert management [3].

The AIF surge reflects broader investor sentiment about current market conditions. As Multi-Act Trade and Investments notes, wealthy individuals are specifically seeking investments with low correlation to public markets, providing a hedge against inflation while benefiting from specialized management expertise [3]. This trend represents both an opportunity and a challenge for high-net-worth individuals in the UK. While AIFs offer certain advantages, they often come with significant drawbacks, including limited transparency, restricted control over specific investments, and complex fee structures.

The appeal of these alternatives is driven by their potential to offer higher returns and stability during market stress [3]. For HNWIs facing eroding economic confidence and seeking reliable income streams in an increasingly volatile market, the search for investment vehicles that offer both defensive positioning and attractive returns without excessive risk has become paramount.

Economic Confidence Decline: The Push Towards Defensive Assets

The surge in alternative investments isn’t occurring in isolation but against a backdrop of plummeting economic confidence among UK’s wealthy. According to the Saltus Wealth Index, economic confidence among HNWIs has collapsed from 84% in August 2024 to just 48% in May 2025—the lowest level recorded since 2021 [2]. This precipitous decline represents a watershed moment for wealth managers and investment advisors.

When nearly half of high-net-worth individuals lose faith in economic stability, their investment priorities shift dramatically toward capital preservation and reliable income streams. The East Midlands has experienced the steepest decline, with confidence plummeting from 87% to just 35% [2]. This widespread erosion of confidence creates an environment where defensive investment strategies become not merely desirable but essential.

What exactly are wealthy investors seeking in this uncertain climate? The answer increasingly points toward investments that offer three critical characteristics: capital preservation, inflation protection, and reliable income generation. These priorities align perfectly with the fundamental attributes of healthcare property syndication investments, which provide asset-backed security with essential service tenants, creating resilience during economic downturns.

The challenge for many HNWIs lies in finding investment vehicles that offer both defensive positioning and attractive returns without excessive risk. Traditional safe havens like government bonds may provide security but often fail to deliver meaningful returns, especially during periods of elevated inflation. Conversely, more aggressive investments may offer higher return potential but expose investors to unacceptable volatility during economic uncertainty.

Healthcare property syndication addresses this dilemma by providing both defensive characteristics and attractive return potential. The essential nature of healthcare services ensures continued demand regardless of economic conditions, while inflation-linked leases provide protection against the erosion of purchasing power that many HNWIs fear during uncertain economic periods.

Healthcare Property Syndication: Transparency vs. Traditional AIFs

While traditional AIFs promise diversification and expert management, they often lack transparency and direct investor control. This opacity can be particularly problematic during periods of market stress when investors most need clarity about their holdings. Healthcare property syndication through Single Asset Funds addresses this limitation by providing clear visibility into the specific asset, its tenants, and income streams—a crucial differentiator for sophisticated investors.

Unlike blind pool funds where investors commit capital without knowing precisely which assets will be acquired, healthcare property syndication allows investors to evaluate each specific property before committing. This transparency extends to understanding tenant quality, lease structures, and the underlying fundamentals driving income generation.

For example, when investing in a healthcare property syndication focused on a dental practice building, investors can directly assess:

The specific location and physical attributes of the property
The tenant’s financial strength and lease terms
Historical occupancy rates and rental growth
Projected income streams and potential capital appreciation
Specific risks associated with the property and mitigation strategies

This level of transparency stands in stark contrast to traditional AIFs, where investors often receive only aggregated portfolio information with limited details about individual investments.

“The need for diversification, a hedge against inflation, and access to expert management” drives the AIF surge, according to Multi-Act Trade and Investments [3]. However, healthcare property syndication delivers these same benefits while maintaining the transparency that many traditional AIFs lack. This combination of professional management with direct asset visibility creates a compelling proposition for sophisticated investors.

How does this transparency benefit investors during uncertain economic periods? When market volatility increases, the ability to understand precisely what you own becomes invaluable. Rather than relying on fund managers’ assurances about portfolio quality, investors in healthcare property syndications can directly assess the resilience of their specific assets.

Does healthcare property syndication offer the same diversification benefits as traditional AIFs? While a single property investment doesn’t provide the same breadth of diversification as a multi-asset fund, healthcare properties themselves offer inherent diversification benefits through their low correlation with traditional market cycles and their essential service nature [3].

NHS-Backed Leases: The Ultimate Inflation Hedge in Uncertain Times

While many AIFs claim to offer inflation protection, healthcare properties with NHS-backed leases provide one of the most direct and reliable inflation hedges available to investors. The combination of a sovereign-backed tenant and contractual rent increases linked to inflation creates a defensive position that few other investment vehicles can match, particularly during periods of economic volatility [3].

NHS-backed leases typically incorporate inflation-linked rent reviews, ensuring that rental income increases in line with inflation measures. This contractual protection provides investors with genuine inflation-proofing rather than the theoretical inflation hedging that many alternative investments promise but fail to deliver consistently.

To illustrate the practical benefits of this inflation protection, consider a healthcare property with an NHS-backed lease that includes annual rent reviews linked to the Consumer Price Index (CPI). During periods of elevated inflation:

If CPI rises by 4%, the rental income automatically increases by 4%
This direct linkage ensures that real (inflation-adjusted) returns remain stable
The sovereign backing of the NHS minimizes default risk even during economic downturns
The essential nature of healthcare services ensures continued demand regardless of economic conditions

Beyond inflation protection, NHS tenancies offer exceptional covenant strength. As a government-backed entity, the NHS represents one of the most secure tenant profiles available in the UK property market. This tenant quality becomes particularly valuable during economic downturns when private sector tenants may face financial distress.

The long-term nature of healthcare leases—often extending 15-25 years—provides another layer of defensive positioning. This lease length creates predictable, long-term income streams that insulate investors from short-term market fluctuations and economic cycles.

For investors concerned about insufficient protection against inflation during periods of economic uncertainty and market stress, NHS-backed healthcare properties offer a compelling solution. The contractual inflation linkage provides a level of protection that few other investments can match, addressing one of the key concerns driving HNWIs toward alternative investments.

"By expanding opportunities into private asset and credit markets, affluent and high-net-worth investors are better equipped to properly diversify their portfolios." - Chayce Horton, research analyst at Cerulli Associates

Property Investment Resilience: HNWIs Increasing Real Estate Allocations

Despite broader economic uncertainties, high-net-worth individuals continue to demonstrate strong confidence in UK property investments. A recent survey conducted by Investec in March 2024 revealed that 77% of HNWIs plan to increase their investment in UK property, with an average additional investment of £380,000 [4]. This survey included a representative sample of UK-based high-net-worth individuals with investable assets exceeding £1 million, providing a reliable indicator of sentiment among this demographic. This commitment underscores real estate’s enduring appeal as a defensive asset class.

Healthcare property syndication builds upon this foundation while addressing the specific concerns driving investors toward AIFs: diversification, inflation protection, and professional management—all within a more transparent structure than typical alternative funds [3]. The healthcare focus provides additional defensive qualities through its essential service nature and demographic-driven demand.

SIRE Capital Partners has positioned its Single Asset Funds (SAFs) to capitalise on this continued confidence in property while offering superior defensive characteristics compared to residential or commercial alternatives. By focusing exclusively on healthcare properties with NHS-backed leases, these investments provide both the property exposure that HNWIs are seeking and the defensive qualities necessary in today’s uncertain economic environment.

The average annual rental growth of 3-5% achieved through inflation-linked leases in healthcare properties demonstrates the tangible benefits of this approach [5]. This performance metric provides concrete evidence of how healthcare property investments can deliver both income stability and growth even during challenging economic periods.

For HNWIs facing challenges in identifying truly resilient assets that maintain performance during market downturns, healthcare property investments offer a compelling solution. The combination of essential service provision, long-term leases, and inflation protection creates a defensive position that few other property sectors can match.

Technology Integration in Healthcare Property Syndication

The healthcare property syndication sector is increasingly embracing technological innovations to enhance investor experience, improve operational efficiency, and provide greater transparency. These technological advancements are transforming how investors interact with their property investments and how properties themselves are managed.

Digital platforms are revolutionizing investor communication and reporting in healthcare property syndication. These platforms provide real-time access to property performance data, financial reports, and market updates, enhancing transparency and enabling investors to make more informed decisions. According to KKR’s Global Wealth Investment Council survey from October 2024, nearly 90% of council members expect to increase allocations to private market investments, including infrastructure, driven partly by technological improvements in investment platforms [16].

AI-driven analytics are being deployed to optimize property management and enhance investment decision-making. These technologies can analyze vast amounts of data to identify patterns, predict maintenance needs, and optimize operational efficiency. HSBC’s Private Wealth Market Pulse Survey indicated that 44% of HNWIs expect advancements in artificial intelligence and technology to create significant investment opportunities in 2025 [17].

Smart building technologies are increasingly being incorporated into healthcare properties to improve energy efficiency, enhance patient experiences, and reduce operational costs. These technologies include advanced HVAC systems, automated lighting controls, and integrated security systems, all of which contribute to both environmental sustainability and operational efficiency.

Ernst & Young’s 2025 Global Wealth and Asset Management Outlook highlighted that firms should accelerate their adoption of digital assets and tokenization strategies to meet client demand [18]. This trend is beginning to influence healthcare property syndication, where tokenization could potentially enable fractional ownership and enhanced liquidity for investors.

For HNWIs seeking investments with both transparency and technological innovation, healthcare property syndication offers a compelling combination. The integration of these technologies addresses key investor concerns about transparency and control while enhancing the operational efficiency and sustainability of the underlying assets.

Tax Efficiency: Healthcare Property Syndication vs. Traditional AIFs

Recent tax policy changes have created significant uncertainty for HNWIs, particularly those with non-domiciled status. On May 15, 2025, Chancellor Rachel Reeves announced amendments to the finance bill, easing the crackdown on non-domiciled residents. The temporary repatriation facility now allows non-doms to bring foreign income and gains into the UK at discounted tax rates ranging from 12% to 15% between 2025 and 2028 [6].

In this evolving tax landscape, the tax treatment of different investment vehicles becomes a crucial consideration. Healthcare property syndication offers potential advantages through established real estate tax frameworks, providing greater predictability compared to some alternative investment structures whose tax treatment may be more complex or subject to future policy changes.

The tax implications of healthcare property syndication for HNWIs include:

Income Tax: Rental income from healthcare properties is subject to income tax, but allowable deductions for property management, maintenance, and financing costs can reduce the taxable amount
Capital Gains Tax: Appreciation in property value is subject to capital gains tax upon disposal, but structured correctly, certain reliefs may be available
Inheritance Tax: Real estate assets can be incorporated into estate planning strategies, potentially offering inheritance tax advantages compared to some financial investments
Stamp Duty Land Tax: Initial acquisition incurs SDLT, but the long-term holding period of healthcare properties typically minimizes the impact of this upfront cost

The transparency of healthcare property syndication extends to its tax structure. Investors can clearly understand the tax implications of their investment, including rental income taxation, capital gains considerations, and potential inheritance tax treatment. This clarity becomes particularly valuable when navigating the complex tax changes affecting high-net-worth individuals in the UK.

For HNWIs facing uncertainty around tax implications of various investment structures, particularly for those affected by recent non-dom policy changes, healthcare property syndication offers a more established and predictable tax framework. The long-term nature of these investments also allows for more effective tax planning compared to more actively traded alternative investments.

"Investors who employ alternative assets as legitimate tools in the portfolio allocation process reduce dependence on traditional marketable securities, facilitating the structuring of truly diversified portfolios." - David F. Swensen

Case Study: Healthcare Property Performance During Market Volatility

The documented performance of healthcare properties, particularly those with inflation-linked leases, provides compelling evidence of their defensive qualities. While many alternative investments claim to offer protection during market downturns, healthcare properties have demonstrated this capability through actual performance metrics.

A 2025 survey by CBRE revealed that 93% of investors plan to deploy more capital into the UK healthcare sector, attracted by its strong demand dynamics and stable operational performance [14]. This overwhelming investor confidence underscores the sector’s resilience and growing appeal among sophisticated investors seeking defensive positioning.

As economic confidence among UK HNWIs has declined sharply—from 84% in August 2024 to 48% in May 2025—there is a growing shift towards defensive investment strategies [2]. Healthcare real estate, known for its resilience and essential service nature, is perfectly positioned to benefit from this trend.

When comparing healthcare property performance to other alternative investments during recent market volatility, several key differentiators emerge:

Income Stability: Healthcare properties have maintained consistent rental income even during periods of market stress, unlike many private equity investments that experienced significant cash flow disruptions
Lower Volatility: The valuation of healthcare properties has shown substantially lower volatility compared to hedge funds and private equity investments, providing greater stability for investors
Inflation Protection: While many AIFs struggled to provide effective inflation hedging during recent inflationary periods, healthcare properties with inflation-linked leases delivered automatic income growth in line with inflation
Defensive Positioning: During market downturns, healthcare properties have demonstrated their defensive characteristics through maintained occupancy rates and rental collections, outperforming many other alternative investment categories

SIRE Capital Partners has achieved average annual rental growth of 3-5% through inflation-linked leases in healthcare properties [5]. This consistent income growth represents a tangible outcome that investors can evaluate against the more theoretical promises of many AIFs. Additionally, a recent acquisition of a dental practice building secured a net initial yield of 5.5%, demonstrating the strong income potential of healthcare properties even in today’s market conditions.

Perhaps most impressively, healthcare property portfolios have delivered a 10% increase in valuation within the first two years of investment, reflecting the robust demand for healthcare assets [5]. This capital appreciation, combined with reliable income growth, creates a compelling total return profile that few other defensive investments can match.

For HNWIs seeking investments that offer both defensive positioning and attractive returns without excessive risk, healthcare property syndication provides a proven solution based on actual performance metrics rather than theoretical promises.

Conclusion

As high-net-worth individuals increasingly shift toward alternative investments in response to economic uncertainty, healthcare property syndication emerges as a compelling defensive strategy. The 32% surge in AIF allocations reflects legitimate concerns about market volatility and inflation [1], but traditional AIFs often fail to deliver the transparency and control that sophisticated investors require.

Healthcare property syndication, particularly through Single Asset Funds focused on NHS-backed properties, offers a superior alternative. By combining the defensive qualities that investors are seeking—inflation protection, income reliability, and capital preservation—with greater transparency and direct asset ownership, this investment approach provides a genuine shield against economic uncertainty.

The continued confidence in UK property investments among HNWIs, despite broader economic concerns, creates a perfect environment for healthcare property syndication to thrive [4]. By addressing both the desire for property exposure and the need for defensive positioning, this investment strategy represents not merely another alternative investment but a sophisticated response to today’s complex investment challenges.

For investors concerned about eroding economic confidence, lack of transparency in traditional AIFs, and insufficient protection against inflation, healthcare property syndication offers a compelling solution. The combination of NHS-backed leases, transparent investment structures, and proven performance during market volatility makes this approach an effective shield against the uncertainties driving the current AIF surge.

To maximize the benefits of healthcare property syndication, investors should:

Focus on properties with strong tenant covenants, particularly those with NHS or government backing
Prioritize investments with inflation-linked rent reviews to ensure income growth keeps pace with inflation
Seek opportunities with experienced asset managers who specialize in healthcare property
Consider the long-term demographic trends supporting healthcare demand when evaluating potential investments
Regularly review portfolio performance and maintain open communication with property managers
Evaluate the technological capabilities of property managers to ensure optimal operational efficiency
Consult with tax advisors to optimize the tax efficiency of property investments within broader wealth management strategies

By following these recommendations, investors can effectively leverage healthcare property syndication as a strategic shield against the economic uncertainties driving the current surge in alternative investment allocations.

Our Opinion

We observe the significant shift by high-net-worth individuals towards alternative investments as a clear signal of the current economic climate and the pressing need for portfolio resilience. While the drivers behind this move – seeking diversification, inflation protection, and expert management – are entirely understandable, we believe the opacity and limited control often associated with traditional alternative funds present considerable drawbacks. Our perspective is that sophisticated investors require not just defensive positioning, but also absolute clarity on their holdings. We see healthcare property syndication, particularly through Single Asset Funds focused on essential services like healthcare, as the natural evolution for those seeking robust, income-generating assets with the transparency and direct oversight that many alternative structures lack.

For us, the strength lies in the fundamental characteristics of the underlying assets. Properties with secure, long-term leases, especially those backed by the NHS, offer a level of income stability and covenant strength that is unparalleled, providing genuine protection against economic uncertainty. Furthermore, the contractual inflation-linked rent reviews inherent in these leases deliver tangible inflation-proofing, a critical requirement for preserving purchasing power. We are confident in the proven performance and resilience of healthcare real estate, supported by demographic trends and consistent investor confidence. We are committed to leveraging technology to enhance the investor experience and operational efficiency, and we recognise the value of a predictable tax framework. This approach, we feel, offers a compelling and transparent solution for navigating today’s complex investment challenges.

Patrick Ryan is a Principal and Co-founder at SIRE Capital Partners, working on Deal Origination and Asset Management. Patrick has spent 20 years in the property sector in London. His first foray into the sector was in 2003 when he co-founded a mezzanine finance business that focused on lending to property developers in and around London. Following this he headed up SIRE Properties, a healthcare focused asset management firm. Patrick has now co-founded SIRE Capital Partners that has expanded on his healthcare asset management focus to take in broader services to include brokerage and capital advisory.