Alternative Investments

PMS and AIF industry set to cross ₹50 lakh crore in next 10 years: Report

With investors looking beyond traditional investments, assets under management (AUM) of portfolio management Services (PMS) and alternative investment fund (AIF) structures are expected to cross 50 lakh crore in the next 10 years, according to a report by PMS Bazaar.

As per the PMS and AIF information, analytics and comparisons platform, growth at a 20% compounded annual growth rate (CAGR) for the next decade to see alternative investments emerge as a powerful tool of wealth creation.

As per official data, the AUM of discretionary and non-discretionary PMS (non-EPFO) stood at 3.97 lakh crore at the end of October 2021. This is expected to grow six-fold and surpass 24 lakh crore by 2031 boosted by robust returns, world-class transparency, and unique investment strategies.

The size of the AIF industry, across all categories, stood at 4.87 lakh crore according to latest data shared by companies. This is expected to grow over six-fold and reach 30 lakh crore figure in the next 10 years. PMS and AIF products are emerging as strong alternatives to grow wealth and investments.

Commenting on the industry development, Aashish P Somaiyaa, chief executive officer, WhiteOak Capital Management, said, “With rising affluence and the preference for a wider variety of risk-return combinations that can be generated across asset classes; PMS and AIFs are becoming the mainstay of any Wealth management proposition.”

PMSes offer advantages such as more customization with investment strategies in tune with investor’s risk appetite. The minimum investment in PMSes is 50 lakh. On the other hand, AIFs, which have a minimum ticket size of 1 crore, offer investors access to sophisticated strategies across different asset classes and more diversification in a risk-adjusted manner.

Vikas M Sachdeva, chief executive officer, Emkay Investment Managers, said, “Recent years have seen the global alternative industry grow at a rapid pace. This is largely driven by a need to enhance returns and increase diversification. This growth is also supported by external conditions such as lower interest rates, availability of information, the maturation of emerging markets, and a structural change in capital formation. Given the current state of the industry, and the recent developments in regulations it is expected that India’s alternative industry will follow the global trend and take a greater share of India’s investable universe.”

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