PMS, AIF industry estimated to expand at 26% CAGR to ₹43 lakh crore by 2028: PMS Bazaar
Alternative Investment Funds (AIFs), has experienced significant growth, surpassing the growth of conventional mutual funds in recent years. This can be attributed to several key factors, which include: Increased investor awareness and affinity for alternative investments: There has been a noticeable increase in investor awareness and a growing appetite for alternative investments.
Assets like private equity, venture capital, and hedge funds offer the potential for higher returns compared to traditional asset classes like stocks and bonds, albeit with greater risk. As investors become more sophisticated and open to taking on increased risk, they are increasingly turning to alternative investments to diversify their portfolios and seek higher returns.
Robust growth of the Indian economy: India's economy stands as one of the fastest-growing major economies worldwide. This remarkable growth is spawning fresh investment opportunities that alternative investment funds are keen to explore and leverage.
Support from the regulatory environment: The Securities and Exchange Board of India (SEBI) has played a pivotal role in fostering the alternative investment industry's growth. In 2012, SEBI implemented the AIF regulations, consolidating various alternative investment funds under a unified regulatory framework, thus providing a conducive environment for their development.
In the preceding five years (from June FY19 to June FY24), the industry has experienced a remarkable Compound Annual Growth Rate (CAGR) of 26%, resulting in impressive assets under management (AUM) of ₹13.74 lakh crore as of June FY24. This growth rate surpasses the mutual fund industry's performance, which registered a CAGR of 13% and managed an AUM of ₹46.63
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