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Markets regulator SEBI is currently studying the concept of ‘accredited investors’ in jurisdictions such as the US, Australia and New Zealand, a top official said.
An accredited investor refers to those investors who are financially sophisticated with lighter disclosure norms. Individuals, banks, finance companies and trusts can be considered as accredited investors.
Working on roadmap “We are going to work with redoubled vigour to introduce this (accredited investor). These are the kind of investors who can add a lot of value to our Alternative Investment Funds (AIF) industry,” G Mahalingam, Wholetime Member, SEBI, said here on Tuesday.
SEBI was studying the practices in the US, Australia and New Zealand to see how “accredited investor” is defined, the preferential treatment accorded to such investors and their risk propensity, Mahalingam added.
He said that SEBI was pondering over the concept of ‘accredited investor’ for the last one and a half months. “We need to chalk out a roadmap to welcome accredited investors,” Mahalingam said.
He also said at the Indian Venture Capital Association’s (IVCA) annual conclave that the AIF industry was growing “pretty fast” in the country going by the recent numbers.
AIFs grow From ₹361 crore of invested funds as at the year ended March 2013, the industry had touched ₹28,486 crore as on December 2016. “This is not a mean achievement at all. (But) we can’t be resting on our laurels,” he said. IVCA Chairman Gopal Srinivasan said that analysis made by Bain, McKinsey and other consultants showed that a minimum of $50 billion investments could be invested in AIFs each year.
The $50-billion figure does not look to be a distant dream at all and this is something that could be worked towards, he added. “I am not sure what is the time line within which we could reach this. Maybe it is two years, three years or four years,” Mahalingam said.
If one were to just translate the commitments today (already $10 billion) into actual flows, then the figure of $50 billion does not look to be a distant dream, he added.
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