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A study released by PMS Bazaar, a PMS distribution firm and aggregator of PMS product shows that the Indian alternative investment industry is poised for explosive growth with AUM expected to surpass Rs. 100 lakh crore by 2030 PMS and AIF.
This projection represents a nearly five-fold increase from current levels in just six years.
Both the PMS and AIF categories have demonstrated remarkable growth, maintaining a compound annual growth rate (CAGR) of approximately 33% over the past decade, says the report.
As of the first quarter of FY 2025, the combined assets of PMS and AIFs reached Rs. 18.87 lakh crore, with AIFs accounting for Rs. 11.79 lakh crore and PMS managing Rs. 7.08 lakh crore, excluding EPFO contribution and advisory services.
The surge in alternative investments is being driven by India's expanding affluent class, with HNIs and Ultra HNIS increasingly seeking personalized investment options. According to PMS Bazaar's analysis, about 70% of PMS strategies that have completed a decade have outperformed their benchmark indices.
R Pallavarajan, Founder and Director, PMS Bazaar, said, “The growth of PMSes and AIFs reflects a fundamental shift in how India’s affluent investors approach their portfolios. The demand for tailored, high-return alternatives is expected to grow substantially in the coming years.”
Naveen Kulkarni, CIO, EVP, Axis Securities said, “The traditional equities industry, dominated by mutual funds, is experiencing a significant shift towards alternates. These alternates are gaining traction due to their potential for better risk-adjusted returns, especially in the post-COVID landscape. Projections suggest that it could see a 3-4x increase in the coming years. This trend underscores that alternatives are not just the future—they are rapidly becoming the present.”
The growth trajectory aligns with India's broader economic ambitions, including its goal to become a $35 trillion economy by 2047, says the report.