Alternative Investment Funds (AIF) commitments top Rs. 13,00,000 crore (US$ 149.25 billion) as High-Net-Worth Individuals (HNIs) prefer diversification

India’s Alternative Investment Funds (AIFs) have seen significant growth, with total commitments reaching Rs. 13,00,000 crore (US$ 149.25 billion) as of December 2024, reflecting a 5% QoQ increase, according to the Securities and Exchange Board of India (SEBI). AIFs raised Rs. 5,27,000 crore (US$ 60.51 billion). In comparison, total investments crossed Rs. 5,00,000 crore (US$ 57.41 billion), driven by High-Net-Worth Individuals (HNIs) and institutional investors seeking portfolio diversification. Category II AIFs, which include real estate, private equity, and distressed asset funds, crossed Rs. 10,00,000 crore (US$ 114.81 billion) for the first time. The private credit segment has expanded rapidly, accounting for 15% of total AIF commitments at Rs. 1,95,000 crore (US$ 22.39 billion), up from 6% five years ago. Vivriti Asset Management raised Rs. 4,800 crore (US$ 551.09 million) for private credit strategies, highlighting the growing demand for structured credit solutions. 

While real estate investments dipped from Rs. 75,000 crore to Rs. 73,900 crore (US$ 8.61 billion to US$ 8.48 billion), investments in Information Technology (IT) and Information Technology-Enabled Services (ITeS) rose to Rs. 30,300 crore (US$ 3.48 billion). Financial services investments increased to Rs. 26,800 crore (US$ 3.08 billion). Under Category I AIFs, Angel funds recorded commitments of Rs. 8,700 crore (US$ 998.85 million). SEBI is now considering expanding the investor base by allowing Accredited Investors (AIs) to be classified as Qualified Institutional Buyers (QIBs). With 65% of AIF investments in unlisted assets and traditional lenders reducing mid-market corporate lending, AIFs—particularly private credit funds—are bridging the gap, offering higher risk-adjusted returns and steady income streams. As market volatility persists, HNIs and institutional investors are expected to increase allocations to AIFs, reinforcing their position as a key pillar of India’s financial ecosystem. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.