India’s Alternative Investment Ecosystem Soars Past ?23 Lakh Crore in Assets

India’s alternative investment landscape has entered a transformative era, with Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) together surpassing ?23 lakh crore in assets as of September 2025, according to a report released on Friday.

Over the past decade, the combined asset base has grown from ?1.54 lakh crore to ?23.43 lakh crore — an extraordinary compound annual growth rate (CAGR) of 31.24%. This surge comes amid global macroeconomic uncertainty, prompting investors to diversify beyond traditional equity and debt markets, as per data compiled by PMS Bazaar.

The report highlights a decade-long shift marked by strong expansion, greater institutional participation, and a clear move among affluent investors toward sophisticated, alpha-driven strategies.

The PMS industry has grown nearly sevenfold in 10 years. Its Assets Under Management (AUM) climbed from ?1.27 lakh crore in September 2015 to ?8.37 lakh crore in September 2025, reflecting a CAGR of 20.75%. The number of SEBI-registered portfolio managers also expanded, reaching 495 — signalling the sector’s rapid maturation.

The AIF segment recorded even more dramatic growth. Total AIF commitments jumped from ?27,484 crore in September 2015 to ?15.05 lakh crore in September 2025, representing a remarkable CAGR of 49.23%. This rise indicates increasing investor interest in private equity, venture capital, private credit, real estate, and other structured strategies that offer alternatives to public markets.

“India’s ultra-rich and HNI investors are rapidly increasing and seeking diversification and reliable sources of alpha. PMS and AIF platforms allow them to access conviction-led, strategy-driven portfolios tailored to today’s complex market environment,” said R. Pallavarajan, Founder and Director of PMS Bazaar.

The company has also introduced AIF Bazaar, a dedicated platform aimed at increasing transparency and accessibility for AIF investors.

Among the AIF categories, Category II AIFs — accounting for about 75% of total commitments — showed the most explosive growth. Commitments soared from ?14,707 crore in 2015 to ?11,20,589 crore in 2025, registering an impressive CAGR of 54.24%.

—With inputs from IANS