PMS, AIF industry set to cross Rs 50 lakh crore AUM in next 10 years: PMS Bazaar

Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) industry is expected to cross Rs 50 lakh crore in assets under management (AUM) on the back of a 20 per cent compound annual growth rate by 2031, according to PMS Bazaar, an analytics platform for investors and intermediaries.

PMS and AIF products generate healthy returns, achieve better penetration and thrive in a favourable regulatory landscape, said PMS Bazaar at the annual summit 'PMS & AIF 4.0: Alternative Assets For All Seasons'.

AUM of discretionary and non-discretionary PMS (non-EPFO) stood at Rs 3.97 lakh crore at the end of October 2021, according to official data.

Further, the industry is expected to grow six-fold and surpass Rs 24 lakh crore by 2031. The size of the AIF industry across all categories stood at Rs 4.87 lakh crore, and is expected to grow over six-fold to reach Rs 30 lakh crore figure in the next 10 years, according to PMS Bazaar's estimates.

PMS and AIF structures are gaining massive traction, with sophisticated investors looking beyond traditional retail-oriented investments, the analytics firm said in a statement.

"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 P Somaiyaa, CEO, WhiteOak Capital Management.

Recent years saw the global alternative industry grow rapidly, 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," said Vikas M Sachdeva, CEO, EMKAY Investment Managers.

PMS is a tool for long-term wealth creation, with a minimum investment of Rs 50 lakh. AIFs have a minimum ticket size of Rs 1 crore, and offer investors access to strategies across different asset classes and more diversification in a risk-adjusted manner.