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.

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.

“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.