How has India’s alternative investment ecosystem surpassed Rs 23 lakh crore in assets?
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Synopsis
India’s alternative investment landscape is undergoing a remarkable transformation, with assets in PMS and AIFs surpassing Rs 23 lakh crore. Discover how this growth reflects changing investor strategies amidst global uncertainties.
Key Takeaways
- Alternative investment ecosystem in India has crossed Rs 23 lakh crore.
- PMS and AIFs have shown remarkable growth rates.
- The rise of Category II AIFs indicates evolving investment strategies.
- Increased participation of affluent investors in complex strategies.
- Launch of AIF Bazaar enhances transparency in the sector.
Mumbai, Nov 21 (NationPress) India’s alternative investment ecosystem is witnessing a pivotal moment, with portfolio management services (PMS) and alternative investment funds (AIFs) jointly exceeding Rs 23 lakh crore in assets (as of September 2025) over the past decade, as highlighted in a recent report.
In the last ten years, these investments have achieved an extraordinary compound annual growth rate (CAGR) of 31.24 percent, escalating from Rs 1.54 lakh crore to Rs 23.43 lakh crore.
This significant transformation is occurring amidst global economic uncertainties, prompting investors to explore options beyond conventional equity and debt assets, according to data collected by PMS Bazaar.
The report indicates a decade of change characterized by swift growth, increased institutional involvement, and a marked transition among wealthy investors towards advanced, alpha-seeking strategies.
The PMS sector has nearly expanded seven times, with Assets Under Management (AUM) increasing from Rs 1.27 lakh crore in September 2015 to Rs 8.37 lakh crore in September 2025, showing a ten-year CAGR of 20.75 percent.
This growth signifies a notable evolution in India’s investment landscape, with the number of SEBI-registered portfolio managers climbing to 495.
The AIF category experienced even more substantial growth. Total AIF commitments soared from Rs 27,484 crore in September 2015 to an impressive Rs 15.05 lakh crore by September 2025, achieving a robust CAGR of 49.23 percent.
This increase illustrates a rising demand for private equity, venture capital, private credit, real estate, and other structured investment strategies that go beyond the limitations of public markets, as noted in the report.
“India’s wealthy and high-net-worth individuals (HNI) are rapidly increasing and are in search of diversification and dependable sources of alpha. PMS and AIF platforms provide them with access to conviction-driven, strategy-focused portfolios tailored for today’s intricate market conditions,” stated R. Pallavarajan, Founder and Director of PMS Bazaar.
The firm has also unveiled AIF Bazaar, a specialized platform aimed at improving transparency and accessibility for Alternative Investment Funds.
The report indicates that among all AIF classifications, Category II AIFs (which constitute approximately 75 percent of total commitments) have shown the steepest growth trajectory, skyrocketing from Rs 14,707 crore to Rs 11,20,589 crore during the same timeframe, achieving a CAGR of 54.24 percent.
Point of View
The significant growth in India's alternative investment ecosystem is a clear indication of a shifting economic landscape. As traditional investment avenues face challenges, the rise of PMS and AIFs highlights the adaptability of investors. This development not only signals increased financial sophistication among Indians but also the potential for enhanced economic stability.
NationPress
22/11/2025
Frequently Asked Questions
What are portfolio management services (PMS)?
Portfolio Management Services (PMS) are customized investment solutions provided by registered portfolio managers, catering to the unique financial goals of individual investors.
What are alternative investment funds (AIFs)?
Alternative Investment Funds (AIFs) are investment vehicles that pool funds to invest in assets such as private equity, venture capital, and real estate, typically beyond traditional investments.
How has the growth of AIFs impacted investors?
The substantial growth of AIFs has provided investors with more diverse options, allowing access to opportunities that can yield higher returns compared to standard market investments.
What does the growth rate of 31.24% signify?
A compound annual growth rate (CAGR) of 31.24% indicates robust growth and increasing investor confidence in alternative investment options over the past decade.
Why are investors moving towards alternative investments?
Investors are gravitating towards alternative investments due to global economic uncertainties, seeking diversification and reliable sources of alpha.
