Alternative investments in India have never been so vibrant, with the combined assets under management of PMS and AIFs crossing Rs 23.43 lakh crore. The surge, primarily facilitated by institutional investors and high net worth individuals chasing alpha, has seen PMS assets become almost seven times larger and AIF commitments grow at a CAGR of close to 50% over the last ten years. As a consequence, these investment vehicles are quickly gaining traction as the new norm in wealth management.

Rs 23 Lakh Crore Boom! PMS and AIFs Power India’s Alternate Investment Transformation

It is fair to say that the Indian alternative investment market is no longer a small one. Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) had a combined asset base of over Rs 23.43 lakh crore as of September 2025, thus marking a decade of remarkable growth in the two sectors. The expansion has been achieved at a healthy compound annual growth rate (CAGR) of 31.24%, and it has been fuelled by increased institutional participation and a notable move by wealthy investors to more structured and strategy-led approaches.

PMS Growth: Sevenfold Expansion Over a Decade

The PMS segment has been on the rise over the past ten years. The combined assets under management of PMS, which includes both discretionary and non-discretionary mandates, increased from Rs 1.27 lakh crore in September 2015 to Rs 8.37 lakh crore in September 2025, thus registering a 10-year CAGR of 20.75%.

The rise in the number of professional managers and the stronger preference of the rich for customized, research-based portfolios that help them navigate the increasingly complex markets are what have largely accounted for this trend.

AIF Momentum: Nearly 50% CAGR in Commitments

The Alternative Investment Funds segment has been merely a rocket in the last 10 years. The total commitments have jumped from Rs 27,484 crore in September 2015 to Rs 15.05 lakh crore in September 2025, thus resulting in an extraordinary 49.23% CAGR.

Category II AIFs have largely contributed to the growth in total commitments, as they account for approximately three-fourths of total commitments. Over the same period their commitments have skyrocketed from Rs 14,707 crore to Rs 11,20,589 crore, a very impressive 54.24% CAGR.

The growing number of funds that are registered in different categories points to the broadened scope as well as the increased sophistication of India’s alternatives market.

Investor Behaviour Signals a Structural Shift

The advent of alternatives in the market is solid proof of the change in investors’ mindset. High net worth individuals are on a constant lookout for investments that offer them diversification, are professionally managed, and are based on strong conviction, which is mostly not the case with traditional products.

The increased involvement of new-age investors, entrepreneurs, senior professionals, and people from emerging urban areas is a further indication of the increased attractiveness of PMS and AIFs. These vehicles are no longer seen as mere niche offerings but rather as an integral part of the modern wealth-management toolkit.

AIF and PMS: The Next Frontier of Wealth Management

With maturing, India’s financial ecosystem is witnessing the faster adoption of alternatives due to lowered regulatory risks, increased institutional involvement, and higher investor awareness. AIF & PMS offerings are at the heart of long-term portfolio building, as they provide investors with the opportunity to create structured strategies to tackle both public and private market segments.

The transformation of the Indian alternative investments market is obvious; the turn towards disciplined, research-driven wealth generation is the trend that is still gaining ‍‌‍‍‌‍‌‍‍‌ground.