The latest SEBI data on AIFs reported that these funds received commitments (roughly equivalent to AUM in MF parlance) to the tune of Rs. 14,490.4 crore in the quarter ending June 2018. Majority of these assets came in category II funds which invest in private equity and structured debt. The category saw inflows of Rs. 7,370.88 crore.
Closely following on its heels were category III funds with 6,436.88 crore of commitments. Category III funds which are essentially hedge funds have grown at a commendable pace of 21% (absolute terms) last quarter. Sunil Subramaniam, MD and CEO Sundaram Mutual Fund believes that increasing demand of structured solutions among HNIs has driven the growth in category III AIFs. “AIFs are catching the eye of HNIs looking for high risk – high return investment options in line with their risk – reward profile. These investors are comfortable taking additional risk to benefit from the higher return potential offered by these funds,” he added.
Vishal Kapoor, CEO IDFC MF believes that the industry is still at nascent stage due to which we may see higher percentage growth. "Instead of focusing on the growth numbers, we should look at the value these funds provide investors compared to traditional investment options. Category III AIFs, which provide a distinct value proposition to investors such as a long-short strategy based portfolio, will continue to attract investments going ahead. However, the interest in long only AIFs is closely linked to the alpha that they can generate over traditional investment options such as mutual funds," he added.
Category III funds can invest in a mix of long-short strategies or distinct themes like pre IPO investments, ESG (environment – social- governance) to name a few.
Category I meanwhile did not see much traction collecting just Rs. 681.65 crore. Category I funds meanwhile grew marginally at 2% (absolute) during the quarter. Category I funds consist of infrastructure funds, social venture funds, angel funds or VC funds.
Commitments raised last quarter
|
Categories |
Commitments raised as on date |
Change |
Percentage growth |
|
|
in (Rs. crore.) |
(Rs. crore.) |
|||
|
31-Mar-18 |
30-Jun-18 |
|||
|
Category I |
28036 |
28717.65 |
681.65 |
2% |
|
Category II |
105799 |
113169.9 |
7370.88 |
7% |
|
Category III |
31261 |
37697.88 |
6436.88 |
21% |
|
Total |
165095 |
179585.4 |
14490.4 |
9% |
Source: SEBI
In terms of market share, category II funds continue to have a major share with (63%) of assets in category II funds followed by category III (21%) and category I (16%).
Category-wise market share
|
Categories |
Commitments raised as on 30-June-18 |
Category-wise market share |
|
(Rs. crore.) |
||
|
Category I |
28036 |
16% |
|
Category II |
105799 |
63% |
|
Category III |
31261 |
21% |
|
Total |
165095 |
100% |
Source: SEBI
