The growth was due to increasing appetite among HNIs for private equity funds, infrastructure funds and real estate funds.
Alternative investment funds (AIFs) have witnessed an impressive growth of over 80% in their assets under management in just about a year.
The commitment raised (somewhat equivalent to AUM in MF parlance) as on December 2014 has increased to Rs.20,458 crore from Rs.11,186 crore in the corresponding period last year.
The growth was largely due to rising interest of HNIs in private equity funds. The Category II which invests in private equity funds, have mopped up highest commitments of Rs. 10,302 crore as on December 2014 as compared to Rs.4,822 crore in December 2013, a growth of over 179% or inflows of Rs.5480 crore in a year.
Similarly, Category I recorded a growth of 41% in its commitments. The AIF Category I invests in start-up or early stage ventures, social ventures, SMEs or infrastructure funds. This category raised commitments worth Rs.7,819 crore as on December 2014 as against Rs.5529 crore in December 2013.
While infrastructure funds have collected a whopping Rs.6,355 crore in one year, social venture funds and venture capital funds garnered Rs.499 crore and Rs.930 crore respectively as on December 2014.
Interestingly,
the Category III which includes hedge funds, saw a massive jump in its
commitments. This category has mopped up close to Rs.2,300 crore as on December
2014 as against Rs.836 crore in the corresponding period last year, a growth of
close to 180%.
Nipun Mehta, Founder & CEO, Blue Ocean Capital Advisors attributed this growth to increased awareness among investors about alternative investment funds. “The growth was due to increasing awareness and appetite of investors for real estate funds, infrastructure funds and private equity funds.” He expects the industry to grow manifold in the coming years.
“Those who had invested in fixed income, gold and real estate didn’t get the kind of returns they were expecting. Hence, they were keen to explore other avenues. Since equity markets have revived and the new government has given thrust to the manufacturing sector, people have started to park their money in private equity, venture capital and hedge funds,” said a senior official of Arthveda, a player in the alternative investments space.
As on May 2014, there are 106 AIFs operational in India.
