The Indian alternative investment sector, which includes Portfolio Management Services (PMS) and Alternative Investment Funds (AIF), is poised to surpass the Rs 100 lakh crore threshold by 2030 as it embarks on a new phase of growth, as per PMS Bazaar estimates.
The PMS and AIF sectors have experienced remarkable growth, achieving a compound annual growth rate (CAGR) of approximately 33% over the past decade, from FY14 to FY25. As of FY25, with data available up to Q1FY25, the total assets of PMS and AIFs have reached Rs 18.87 lakh crore. This total includes Rs 7.08 lakh crore in PMS (excluding EPFO contributions and advisory services) and Rs 1.79 lakh crore in AIFs, with Category-II AIFs accounting for the majority of the assets.
If this growth trajectory continues, the overall industry is projected to surpass Rs 100 lakh crore by 2030, marking an over 5-fold increase in just 6 years. The potential for growth in the longer term depends on sustained growth, economic conditions, and investor interest, according to PMS Bazaar estimates.
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India’s rapid economic growth, fuelled by government initiatives, domestic market expansion, and infrastructure investments, has created an environment ripe for alternative investments. As India aspires to have $35 trillion economy size by 2047 and enters its next phase of rapid development, PMS and AIF are increasingly becoming the vehicle of choice for HNIs and UHNIs, seeking more personalized and higher-yielding investment options.
Recent regulatory changes aimed to enhance investors’ protection are expected to further drive HNIs towards alternative investments. Performance of alternates also have been decent, with long-term alpha creation. For instance, within the PMS Bazaar universe, of the 62 PMS strategies that have completed a decade, about 70% have delivered strong long-term performance, outperforming benchmark indices.
In addition, SEBI has been strengthening regulations for both PMS and AIF, ensuring that these products become more efficient and investor-friendly, thereby enhancing their appeal in the market.
Commenting on this, R. Pallavarajan, Founder & Director, PMS Bazaar, says, “The growth of PMS and AIF reflects a fundamental shift in how India’s affluent investors approach their portfolios. The demand for tailored, high-return alternatives is expected to grow substantially in the coming years.
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