New Delhi (India), September 7: The Alternative Investment Funds (AIFs) industry in India has been observing significant growth over the past few years as investors seek higher returns and diversification in their portfolios. According to industry experts, the dynamics of AIFs in India have been quite promising, with a positive outlook for the future.
Alternative Investment Funds refer to a category of pooled investment vehicles that invest in non-traditional asset classes such as private equity, real estate, hedge funds, and infrastructure. The primary objective of AIFs is to provide investors with access to alternative investment opportunities that offer higher returns than traditional investment options.
Mr. Maya Sharan Singh, Director of Lares Algotech, a leading hedge fund management company , believes that AIFs offer a unique opportunity for investors to diversify their portfolios and generate higher returns. He says, India’s AIF landscape, anchored by retail and HNI investments, is an exciting evolution. This not only democratises investment access but also aligns with the diverse economic goals of the nation. As the Indian financial ecosystem matures, AIFs are poised to play a pivotal role in facilitating economic growth, innovation, and job creation.”
He further adds, “In a testament to the continued success of the hedge fund industry, the combined net worth of the top 20 hedge fund billionaires has reached an impressive $245 billion, this exemplifies the potential for substantial growth and prosperity within the AIF landscape”.
India has grown significantly in recent years, with assets under management (AUM) crossing the INR 6.9 trillion mark in 2022 with a 7x growth from INR 1 trillion in 2017. This growth can be attributed to various factors such as increased investor awareness, a favourable regulatory environment, and the need for alternative investment options in a low-interest-rate environment.
The AIF industry in India has witnessed a surge in interest from both domestic and foreign investors, with several global players entering the market in recent years. AIFs offer investors a unique opportunity to diversify their portfolios and generate higher returns. However, investors need to conduct thorough due diligence and understand the associated risks before investing in an AIF. With a favourable regulatory environment and increasing investor awareness, the AIF industry is poised for continued growth in the coming years.
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