AIF becomes Rs.4.40 lakh crore industry

The AIF industry witnessed a healthy growth of 27% in their AUM in the last one year.

The latest SEBI data shows that the commitments raised (equivalent to AUM in MF parlance) by AIFs has increased to Rs.4.41 lakh crore in December 2020 from Rs.3.47 lakh crore in December 2019.

“The growth is attributed to economic revival and surge in investment activities in the country. There is a lot of enthusiasm in the AIF space, as it offers attractive opportunities to HNIs to invest in funds like venture capital funds, real estate, long only funds, unlisted markets and start-up funding,” said Tarun Birani, Founder & CEO TBNG Capital Advisors.

A large part of the investment came from Category II funds (80%) that includes real estate funds, private equity funds and funds for distressed assets. These funds offer exposure to assets in which traditional mutual funds schemes do/can not invest. Category II funds raised commitments worth Rs.3.53 lakh crore as on December 2020 from Rs.2.61 lakh crore in December 2019.

Category III and Category II contributed 10% and 11% to total AIF assets respectively.

Category 3, which includes long short funds, long only funds and hedge funds, saw a marginal decline of 3% in its commitments. The commitment raised in this category has fallen to Rs.46,824 crore in December 2020 from Rs.48,151 crore in the corresponding period last year.

Category I recorded a healthy growth of 10% in commitments raised. This category has raised commitments worth Rs.42,352 crore as on December 2020 as against Rs.38,825 crore in December 2019. This category of AIFs invests in start-ups or early stage ventures, social ventures, SMEs or infrastructure funds.