India’s financial ecosystem is witnessing a paradigm shift. As traditional investment instruments like mutual funds and equities mature, high-net-worth individuals (HNIs), family offices, and institutional investors are increasingly turning to Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) for tailored, high-performing wealth strategies.
Backed by robust regulatory frameworks, rising investor sophistication, and strong long-term returns, PMS and AIFs are no longer niche—they are becoming mainstream. According to recent industry data, the combined assets under management (AUM) for PMS and AIFs have crossed ₹18.87 lakh crore, with projections soaring past ₹100 lakh crore by 2030.
Current Landscape (FY25 Q1)
- Combined AUM for Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) stands at ₹18.87 lakh crore, split between:
- PMS: ₹7.08 lakh crore
- AIFs: ₹11.79 lakh crore (largely driven by Category II funds)
- This marks a compound annual growth rate (CAGR) of approximately 33% over the past decade (FY14–FY25).
Projected Growth to 2030
- At this pace, AUM is on track to surpass ₹100 lakh crore by 2030—a more than five-fold increase within six years.
- EY & Julius Baer reinforce this trajectory, citing the exponential rise of family offices—from 45 in 2018 to 300 in 2024—which are increasingly channeling capital into alternative investments.
What’s Driving the Surge?
1. Rising Affluent Investor Base
- Surge in HNIs and UHNIs seeking portfolio diversification beyond traditional assets
- Family offices allocating 25–50%+ of their portfolios to AIFs, favoring private credit and alternative strategies
2. Regulatory Evolution
- SEBI is strengthening investor protections and clarifying frameworks.
- Category II AIFs can now invest in listed debt (rated A or lower), with gains treated as capital gains—improving tax efficiency
3. Superior Long-Term Performance
- Among 62 PMS strategies tracked over a decade, 70% have outperformed benchmark indices
- Many investors now expect better risk-adjusted returns than conventional equity mutual funds .
4. Economic Momentum & Infrastructure Spending
- India’s push toward becoming a $35 trillion economy by 2047, backed by government reforms, infrastructure initiatives, and growing domestic demand, further catalyzes growth in alternative asset classes
A Strategic Shift in Investor Behavior
- Tailored & Active Investing: Investors now prioritize personalized solutions (via PMS) and access to niche opportunities (via AIFs).
- Diversification Beyond Equities: Channels like private credit, real assets, and startups, once accessible only to global investors, are now mainstream domestically
- Technology & WealthTech: Digital wealth platforms streamline access, transparency, and research-driven decision-making — enhancing investor confidence .
Comparative Snapshot
| Metric | FY14 Overview | FY25 Q1 | 2030 Projection |
|---|---|---|---|
| CAGR | Base | ~33% | Continued high growth |
| AUM | ₹~1 lakh cr | ₹18.87 lakh cr | ₹100 lakh cr |
| PMS | Niche | ₹7.08 lakh cr | High-growth |
Expert Insights
- R. Pallavarajan (PMS Bazaar): “This reflects a fundamental shift … demand for tailored, high-return alternatives … pivotal in propelling India’s economic growth.”
- Naveen Kulkarni (Axis Securities): “Alternatives are gaining traction due to better risk‑adjusted returns … projections suggest a 3–4x increase … alternatives are rapidly becoming the present.”
What It Means for Investors
- For HNIs & Family Offices: PMS and AIFs present robust pathways to customized, multi-asset portfolios with potentially higher returns.
- For Financial Institutions: Significant opportunity lies in structuring innovative, compliant, tech-enhanced platforms for these vehicles.
- For Economic Planners: Capital from these assets is feeding into real economy growth—fueling infrastructure, innovation, and credit markets.
Conclusion: A Defining Decade for PMS & AIF Investors
India’s wealth management landscape is undergoing a historic transformation. With PMS and AIF assets projected to surpass ₹100 lakh crore by 2030, we are entering a golden era for alternative investments—driven by rising affluence, stronger regulatory support, personalized strategies, and consistent outperformance.
For investors seeking to move beyond traditional avenues, PMS and AIFs offer unmatched access to diversification, alpha generation, and long-term value creation. And for forward-thinking platforms like Punjibaazar, this is not just an opportunity, it's a responsibility to guide wealth with integrity, innovation, and insight.
The future of Indian investing is alternative. The future is now.