PMS and AIF Assets on Track to Shatter Rs 100 Lakh Crore by 2030!
The PMS and AIF sectors have been on a tear, achieving an incredible compound annual growth rate (CAGR) of about 33% over the last decade (from FY14 to FY25). As of FY25, these combined assets have already reached Rs 18.87 lakh crore, with PMS accounting for Rs 7.08 lakh crore and AIFs taking the lion’s share with Rs 11.79 lakh crore!
If this momentum continues, we’re looking at an astonishing five-fold increase by 2030. The long-term growth potential is driven by sustained investor interest, favorable economic conditions, and dynamic market forces, making this a thrilling time to dive into the world of alternative investments.
India’s explosive economic growth, fueled by robust government initiatives and massive infrastructure investments, has created a fertile ground for alternative investments to thrive. As the nation sets its sights on becoming a $35 trillion economy by 2047, PMS and AIFs are becoming increasingly appealing to high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNIs) who crave personalized and high-yield investment options.
Recent regulatory enhancements aimed at bolstering investor protection are set to further entice HNWIs into the realm of alternative investments. With an impressive track record of long-term alpha generation—where approximately 70% of the 62 PMS strategies that have stood the test of time outperform benchmark indices—these investment vehicles are delivering exceptional results.
Moreover, the Securities and Exchange Board of India (SEBI) is stepping up to strengthen regulations for PMS and AIFs, ensuring these products are not only efficient but also investor-friendly. “The rise of PMS and AIFs signals a monumental shift in how India’s affluent investors manage their portfolios. The demand for tailored, high-return alternatives is on the brink of substantial growth. These vehicles are crucial in driving India’s economic progress, social advancement, and governance, aligning perfectly with the government’s ambitious growth objectives,” says a notable industry expert.
The burgeoning demand for PMS and AIFs is underpinned by rising affluence, growing financial literacy, favorable regulations, and an ever-expanding ecosystem of investment opportunities. This perfect storm positions India as a global financial hub bursting with lucrative investment prospects.
“The traditional mutual fund landscape is witnessing a seismic shift towards alternative investment structures like PMS and AIF. These alternatives are gaining traction due to their potential for superior risk-adjusted returns, especially in the post-pandemic world. Projections suggest a remarkable 3-4x growth in this sector in the coming years—it’s clear that alternatives are not just the future; they are rapidly becoming the present,” remarks a leading industry voice.
As India’s economic momentum continues to accelerate, the appetite for alternative investments like PMS and AIFs is set to skyrocket. For HNWIs and UHNIs seeking superior returns, enhanced diversification, and bespoke portfolio management, these vehicles are becoming indispensable.
With a vibrant economy, robust government policies, and a progressive financial ecosystem, the future of PMS and AIFs in India is brimming with promise. As the nation strives toward development by 2047, the growth of these alternative investment products is poised to play a pivotal role in reshaping the financial landscape of the country.
