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PMS and AIF industry to grow by 20% in the next ten years

Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) has emerged as “alternatives” for a powerful tool of wealth creation

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Akashdeep Arul
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PMS and AIF industry to grow by 20% in the next ten years

With investors looking beyond traditional retail-oriented investments, Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) structures has gained massive traction.

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By 2031, PMS and AIF industry is expected to cross Rs.50 lakh crore on the back of 20% CAGR growth after it gives healthy returns, achieve better penetration, and thrive in a favorable regulatory landscape, PMS Bazaar said in its annual summit.

“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,” said Aashish Somaiyaa, CEO, WhiteOak Capital Management.

As per official data, assets under management of discretionary and on-discretionary PMS (non-EPFO) stood at Rs.3.97 lakh crore at the end of October 2021. This is expected to grow six-fold and surpass Rs.24 lakh crore by 2031 on the back of robust returns and transparency.

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“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,” said Vikas Sachdeva, CEO, EMKAY Investment Managers.

A tool for long-term wealth creation, PMSes offer many advantages such as more customization with investment strategies in tune with investors' risk appetite. On the other hand, AIFs, which have a minimum ticket size of Rs.1 crore, offers investors access to different asset-classes and more diversification in a risk-adjusted manner.