In the five-year period from 2002 to 2007, any investment made in the realty segment, barring a few odd spots, turned in returns ranging from 10x to a low 2x for exits in 2010/2011. This phenomenon could be achieved due to a large correction between 1997 and 2001, which was due to the Far East realty-led currency crisis coupled with Y2K. Looking at the phenomenal returns in isolation and without looking at the run-up to the causes of the returns, Indians and non-resident Indians (NRIs) started entering this sector vigorously and investments were made across land, plots, villas, retail units, commercial units and apartments starting 2007. This also coincided with the phase of the rise of Real Estate funds led by HDFC and ICICI, with global road shows attracting NRI and offshore funds. Given the drum roll, many investors could just not resist jumping onto the bandwagon for fear of missing out on the opportunity. Investments were made across the spectrum of geographies and segments through friends and family members besides relationship managers of MNC wealth management companies through collective investment schemes. Nobody had realised that the Lehman Brothers banking crash could have such a stalling effect to the overall economic activity - so much so that the composition of industry itself would undergo a dramatic shift where suburbs of certain cities would have people who focus only on ecommerce, mobile apps and big data. Only a couple of years ago, these would have SME manufacturing facilities and a very industrial suburb-like feel. Investors who entered the realty sector in late 2007, found that they were barely making 10 per cent annualised returns on their investments, which if leveraged on rupee basis was less than the interest paid! Given the gross mismatch between expectation and reality, investors held on to their direct investments and sadly, quite a few of the collectives that were managed by professional firms too could not anticipate the dramatic shift in the landscape, leaving the investors disappointed in the sector. Beginning 2014, the early realty funds have started exiting the investments as it marked the end of the seven-year fund life. But, at the same time, there is a parallel raising of funds which has caused sceptics to believe that this could be a case of transfer of assets from one fund to another. Even if one fund was exiting and another fund raising money for a new scheme, some sceptics felt this could be another form of asset transfer for liquidity, given some markets like the National Capital Region (NCR) were trading below par. Greed had turned into fear. Basically, given the phase of poor returns over the past five years, in general, investors who have been investing optimistically in this sector since 2000 have by and large become cautious in not just their direct investments but also in investing through collectives, irrespective of the brand name of the fund. They are keen to know the key decision-makers, their past performance in specific investments, their view of certain developers, markets etc. Scrutiny is intense. For their direct investments, they have now started bringing on board neutral advisors who will assess the situation and advise. The advice could be either sell/ hold for their existing portfolio and specific advisory fees paid for this activity, separating it from the transaction fee for executing the trade. For investors whose portfolio runs into an equivalent to millions of dollars, these advisors have started advising the investors on all opportunities that come by the way of the investor with little participation in the actual execution, where they oversee the best platform for executing the sale/ purchase/ lease. In fact, these advisors are specialist extensions to some family offices, bringing to the table independent views of the investment opportunity. Investing in realty in India now seems to have become more knowledge-driven, with advice and execution platforms beginning to split up. The serious investors have no option but to start enlisting professional advisors who can guide them through this market as against the earlier practice of going by the word of friends and family. Deepak Sam Varghese, founder-director of Moonbeam Advisory, is a career banker with nearly two decades of experience in retail and private banking. He is a specialist in banking services and wealth advisory and has been advising domestic and non-resident Indians (NRI) in Mumbai, Delhi, Dubai, Singapore and London, where he was based. Now Bangalore-based, his special emphasis is on financial advisory in real estate transactions, advising investors and developers in key Indian metros. The above article was published in India Inc′s print edition of the India Investment Journal launched in April 2015 in conjunction with the Global Wealth Management Conclave 2015.