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The Alter-NATIVE series AIFs see massive demand: commitment crosses a trillion

AIFs see massive demand: commitment crosses a trillion

Private equity and debt funds account for 60% of the total size of the AIF industry.
Padmaja Choudhury Nov 9, 2017

HNIs have been increasingly investing their money in alternative funds.

SEBI’s latest data shows that the AIF industry has raised commitment of Rs.1.16 lakh crore as on September 2017. Commitment raised is equivalent to AUM in  mutual fund parlance.

Of Rs1.16 lakh crore, the AIF industry witnessed commitments of over 60% or Rs.70,498 crore in category II. The category II AIF invests in listed and unlisted securities through private equity funds and private debt funds.

While Category I which invests in venture capital and infrastructure funds received commitments of Rs.22930 crore, Category III or hedge funds and long only funds raised commitment of Rs.32,470 crore.

Experts attribute this growth to the increasing demand of alternative investments among HNIs. “Many HNIs have received attractive returns from AIFs in the past. In addition, AIFs gives them exposure to unlisted equity and debt space which is restricted to a certain limit in mutual funds,” says Akshay Gupta, CEO, Indiabulls AMC.

Another reason behind the popularity of the AIFs is wide range of offerings. “There has been an increasing demand for innovative products such as long only funds and hedge funds among HNIs,” says Radhika Gupta, CEO, Edelweiss AMC. The hedge funds and long only funds have seen a whopping 180% increase in commitment raised in the last one year.

 There were 346 AIFs as on September 2017 compared to 250 in September 2016.

Data relating to activities of Alternative Investment Funds (AIFs)

Category

Commitments raised

September 2017

Commitments raised

September 2016

Difference

Difference %

Category I Total

22,930

18,903

4,027

21

Category II

70,498

38,028

32,470

85

Category III

22,657

8,082

14,575

180

Grand Total

1,16,085

65,013

51,072

79

Source: SEBI

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