AIFs grew 42 per cent to Rs 6.94 lakh crore in the year-ended October, official data reveals

Portfolio Management Services and Alternative Investment Services is expected to grow 2.5 times to Rs 30 lakh crore from the current level of Rs 12 lakh crore in three years.

AIFs witnessed 42 per cent growth to Rs 6.94 lakh crore (Rs 4.87 lakh crore) across all three categories in the year-ended October, according to data released at PMS Bazaar’s annual summit, held in Mumbai on Friday.

The total size of PMS has risen 23 per cent to Rs 4.89 lakh crore from Rs 3.97 lakh crore.

The sharp growth in both the personalised investment options for high networth investors comes on the back of the faster pace of economic development, with GDP touching $3 trillion in 2021 from $1 trillion during 2007.

Moreover, the investable asset classes are getting wider, opening up attractive and opportunistic investment options for fund managers and investors.

Vikaas M Sachdeva, Managing Director, Sundaram Alternates, said the Alternates space has been evolving rapidly to meet the requirements of the burgeoning UHNI segment.

In 2007, China was at a similar stage of evolution in terms of the financial landscape. At the very least, the industry has the potential to grow three times in the next five years, in line with the growing aspirations of a wealthy India, he said.

The Indian alternates industry will build its own ecosystem, interfacing with regulators through strong industry associations, he added.

The total commitments raised across the AIF industry have increased by over seven times in the last five years to Rs 6,94,521 crore from Rs 96,021 crore.

Although the Indian Alternative space has been growing exponentially over the last one decade, India’s AUM of $60 billion is just 0.46 per cent of the Global AUM of over $13 trillion in 2021.

According to Daniel GM, Founder-Director, PMS Bazaar, with the Indian economy marching towards the $5-trillion mark, the stage is set for investors to take their wealth to the next level by tapping into new age alternates that have excellent disclosures, a supportive regulatory environment and robust investment returns.