Listen to this article
A report released by CAMS and Equalifi reveals 58% of the total AIF assets has come from distributors.
The data shows that participation of wealth managers, banks and national distribution in the total AIF decreased from 73% in 2019 to 58% in 2023, a decline of 15% in overall asset composition of AIFs.
The report says that this was due to a change in business model of wealth managers. Many wealth managers have moved from commission led model to advisory model for AIF distribution. It said, “The drop is largely seen in the contribution from wealth manager segments (from 51% to 36%)indicating a higher share of advisory led sales compared to commission led sales. Banks and national distributors maintained a steady share of 20% in the overall AIF sales over the last five years.”
In terms of AIF fund categories, distributors prefer category III AIFs as over 80% of the assets in this category has come from distribution channel. In contrast, direct investors prefer category I funds with 70% of the funds raised coming through them.
Overall, AIF fund raising has seen a considerable growth in direct investment in the last 5 years. The amount collected from direct investment has grown 2.5 times to make up 42% of the total funds collected in FY23 compared to 27% in FY19.