Money & Banking

Crisil launches indices for alternative investment funds

Our Bureau Mumbai | Updated on October 01, 2020 Published on October 01, 2020

Indices to cover AIF categories I, II & III; to compare performance of AIFs in each category, common category-level peer benchmarks have been created

Crisil Research has launched benchmark indices for the domestic alternative investment fund industry.

The indices will cover all the three AIF categories — I, II and III — and provide investors with a metric to compare the performance of a scheme with the peer set.

Nagarajan Narasimhan, Senior Director, Crisil Research said after a tepid start a decade ago, the Indian AIF industry has grown exponentially with a commitment of ₹3.85-lakh crore since 2012 to June this year.

However, there was no common metric to ascertain the performance of the industry. The launch of the AIF benchmarks by Crisil will plug this gap.

Benchmarking develops a set of standardised performance metrics to help investors identify efficient fund managers, detect risks and take sound investment decisions. It also provides a yardstick to fund managers and other stakeholders to compare and course-correct.

Also read: SEBI wants IPO-like prospectus from AIFs

Piyush Gupta, Director, Crisil Research, said for AIF categories I and II, the benchmarks use aspects such as pooled internal rate of return, multiples and realisation ratios. These benchmarks are based on vintage to bring uniformity in comparison to funds with similar performance history.

For category-III benchmarks, quarterly returns, along with respective assets under management, have been used to create an asset-weighted index at the category-level from the quarter in which at least three schemes were available to invest.

For all category benchmarks, returns are calculated on a post-expense, pre-carry and pre-tax basis, both in rupee and dollar.

Also read: AIF rescue: Devil in the details

To compare performance of AIFs in each category, common category-level peer benchmarks have been created. As the industry matures, sub-category indices based on investment strategy and mandate will also be developed, it said.

The data will be disclosed half-yearly (end-September and March), as per guidelines prescribed by the Securities and Exchange Board of India.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on October 01, 2020
This article is closed for comments.
Please Email the Editor