SEBI has released a fresh list of AIFs which shows that it has given approval to 26 new players in three months. As a result, the total count of AIFs has increased to 235 as on June 2016 from 209 in March 2016. There were only 143 AIFs as on March 2015.
Of 21 new AIFs, SEBI has given its go ahead to 13 AIFs under Category II funds which invest in PE funds. With this, the total number of Category II funds has increased to 121 as on June 2016. The Category II funds account for 62% of the market share in terms of commitment raised or AUM in MF parlance. As on March 2016, the Category II funds had raised commitments of Rs. 24,061 crore.
Similarly, with an addition of nine new AIFs in Category I funds in FY 2015-16, the total number of funds has increased to 81 as on June 2016. The AIF Category I funds invest in start-up or early stage ventures, social ventures, SMEs or infrastructure funds.
This category has raised commitments worth Rs. 10,568 crore as on March 2016.
Meanwhile, Category III which includes hedge funds, saw four new additions. The total number of hedge funds operating in India has increased to 32 as on June 2016. In terms of AUM growth, the commitment raised in this category has gone up to Rs.4, 249 crore as on March 2016 from Rs.1,865 crore in the corresponding period last year.
Currently, AIFs have a limited set of investors such as PSU banks, corporates and UHNWIs because of the Rs. 1 crore ticket size. To attract a bigger pool of investors, SEBI has recently allowed Foreign Portfolio Investors (FPIs) to invest in units of REITs, Infrastructure Investment Trusts (InvIts) and Category III AIFs.
IFAs can also sell AIFs. The commissions offered by AIFs are comparatively better than other market linked financial products. However, only a few advisers are selling these products because of the high minimum ticket size.
AIFs manage Rs. 38,880 crore as on March 2016.
