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When most investors think about AIF, they typically think of listed equities. However, Anunaya Kumar, President of Sales & Distribution at 360 ONE Asset took the podium at the CafeAlt Conference 2024 to share insights on how distributors can think beyond listed equities to increase the wallet shares from existing clients.
While the global financial landscape has seen consistent growth since 2005 with assets growing by about 6% annually over a 16-year period, it witnessed significant growth post 2022. This is largely due to two factors – rising demand for alternates and passives.
Over the past decade, both alternates and passives have grown tremendously. In fact, compared to traditional investments, alternative funds raised have grown almost three times faster.
Within the alternative investment space, Category II AIF funds have expanded significantly. From 0.41 lakh crore in 2017, it has risen to 2.85 lakh crore in 2023.
This is largely due to growth in AUM of private credit, which has grown by 8x in recent years due to high yielding opportunities and decreasing NPA in the credit space. There are major opportunities for MFDs in private credit space, with the $96 billion industry estimated to grow at 12% annually.
The private credit holds significant opportunities, and in the next five years, these funds are expected to deliver substantial returns.
This highlights the vast potential for growth in alternates in the future. The estimated growth of India’s AIF AUM is projected to double from 50 lakh crore to 100 lakh crore by FY 2027 (including AIF and PMS).
You can watch the complete session on Cafemutual’s YouTube channel here.