PMS & AIF asset base to swell over `50trn in next 10 years

Mumbai: With sophisticated investors looking beyond traditional retail-oriented investments, Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) structures are gaining massive traction.

By 2031, PMS & AIF industry is expected to cross Rs 50 lakh crore on the back of 20 per cent CAGR growth as PMS and AIF products generate healthy returns, achieve better penetration and thrive in a favourable regulatory landscape, PMS Bazaar said at the annual summit 'PMS & AIF 4.0: Alternative Assets For All Seasons'.

As per official data, assets under management of discretionary & non-discretionary PMS (non-EPFO) stood at Rs 3.97 lakh crore at the end of October. This is expected to grow 6-fold and surpass Rs 24 lakh crore by 2031 boosted by robust returns, world-class transparency, and unique investment strategies. The size of AIF industry, across all categories, stood at Rs 4.87 lakh crore according to the latest data shared by companies. This is expected to grow over 6-fold and reach Rs 30 lakh crore figure in the next 10 years. PMS and AIF products are emerging as strong alternatives to grow wealth and investments.

Aashish P Somaiyaa, CEO 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."

Vikas M Sachdeva CEO, 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."

A tool for long-term wealth creation, PMSes offer many advantages such as more customization with investment strategies in tune with investors' risk appetite. They have generated alpha or benchmark beating returns, consistently over a long period of time. The minimum investment in PMS is Rs 50 lakh.

On the other hand, AIFs, which have a minimum ticket size of Rs 1 crore, offers investors access to sophisticated strategies across different asset classes and more diversification in a risk-adjusted manner. This has led to the stupendous growth of AIFs over the past 5 years.