The Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) industry in India is experiencing significant growth, driven by increasing investor awareness and appetite for alternative investments. The industry is expected to reach ₹43.64 lakh crore by 2028, growing at a Compound Annual Growth Rate (CAGR) of 26%. This growth is fueled by rising incomes in India, creating a pool of wealth-seeking investment avenues beyond traditional assets, and a supportive regulatory environment. The Securities and Exchange Board of India (SEBI) has played a pivotal role in fostering the alternative investment industry's growth by implementing regulations and providing a conducive environment for their development.
The growing demand for alternative investments like private equity, venture capital, and hedge funds is driven by their potential for higher returns and diversification. India's International Financial Services Centre (IFSC) in Gift City is emerging as a prominent player in alternative investments, offering benefits like a supportive of regulatory landscape and global connectivity. Alternative Investment Funds (AIFs) have showcased phenomenal growth, recording a CAGR of 36% in the past five years, driven by Category II AIFs, including venture capital, private equity, real estate funds, and private credit.
The PMS industry has demonstrated resilience, growing at a CAGR of 16%, despite regulatory changes. The industry's growth is expected to be sustained, driven by increasing demand for alternative investments among High-Net-Worth Individuals (HNIs) and Ultra-High-Net-Worth Individuals (UHNIs). With the potential to surpass the USD 300 billion mark, the PMS and AIF industry is poised to become a significant player in India's financial landscape
