PMS-AIF industry set to zoom, asset size may jump 2.5x by 2025: PMS Bazaar

Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) industry will see 2.5 times asset expansion in the next three years, PMS Bazaar, a portal that hosts information and also analysis the industry, said.

At its annual summit on November 18, PMS Bazaar said the asset size of the industry will grow to Rs 30 lakh crore from Rs 12 lakh crore if it maintains the growth rate.

AIFs witnessed a strong growth of 42.5 percent year on year (YoY) with assets growing to Rs 6.94 lakh crore from Rs 4.87 lakh crore across all three categories—Category I AIF, Category I AIF and Category III AIF.

AIFs are risky investment tools that largely cater to the richest section of investors. They are allowed to take all kinds of risky bets including investing in startups, long-short strategies and other derivatives.

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The total size of the PMS industry rose 23.2 percent YoY with assets growing to Rs 4.89 lakh crore from Rs 3.97 lakh crore.

“With New Age Alternates, excellent disclosures, a supportive regulatory environment and robust returns from newer investment avenues, the stage is set for the prosperous to take their wealth to the next level as India marches towards becoming a $5 trillion economy,” said Daniel GM, Founder–Director, PMS Bazaar.

The growth in the PMS and AIF industry is in tandem with an emerging range of investable asset classes that are getting wider.

“In line with the growth of wealth - as well as the wealthy in India - the Alternates space has been evolving rapidly to meet the requirements of the burgeoning ultra high net worth individuals (UHNI) segment,” said Vikaas M Sachdeva, Managing Director, Sundaram Alternates.

“One can understand the potential of this industry if one just looks back at China in 2007, which was at a similar stage of evolution in terms of the financial landscape. At the very least, the industry has the potential to grow 3x in the next five years in line with the growing aspirations of a wealthy India.”

The total commitments raised across the AIF industry increased by over 7 times (48.5 percent CAGR) over the last five years—from Rs 96,021 crore as of June 30, 2017 to Rs 6,94,521 crore as of June 30, 2022, PMS Bazaar data shows.

Though the alternative space has been growing exponentially over the last decade, India's global share of alternative investment is minuscule. India’s AUM of $60 billion is just 0.46 percent of the global AUM of more than $13 trillion in 2021.

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