AIF investments grow 9% in Q1 of calendar 2018; cumulative growth at 75%

Experts say key decisions by Sebi and other factors helped spur growth, improving liquidity and depth in the market

Alternative Investment Funds made investments worth Rs 72.78 billion during the first quarter ended March 31, of calendar 2018, up 8.5 per cent from Rs 66.13 billion in the same period in 2017. However, the investments were down 32.3 per cent from Rs 106.84 billion made in the immediately preceding quarter ended December 2017.

Cumulative investments by AIF at the end of March 2018 stood at Rs 614.02 billion, up 75 per cent from Rs 350.99 billion during the same period of last year. They grew at a monthly compound annual growth rate (CAGR) of 4.8 per cent over the past 12 months, according to a report by AIF research firm Venture Intelligence.

Experts said that decisions by market regulator Sebi, along with other market conditions, helped spur growth of AIF investments and improved the liquidity and depth in the market. The overall improvement in the economy has also helped boost investments. 

Fundraising by the AIFs also rose during the year, according to Venture Intelligence data. At the end of March 2018, AIFs cumulatively raised commitments worth Rs 1,650 billion, compared with Rs 840 billion during the previous fiscal ended March 2017. Between January and March 2018, AIFs raised commitments worth Rs 240 billion -- a 71 per cent increase over Rs 140 billion in the same period in 2017.

Cumulatively, AIFs have raised funds worth Rs 850 billion at the end of March 2018, or twice the amount of Rs 410 billion raised at the end of March 2017. In the January-March 2018 period, AIFs have raised Rs 130 billion -- a 72% increase over Rs 76 billion in the same period in 2017.

Category-I AIFs, which focus on start-ups, early-stage ventures, social ventures or SMEs that are socially or economically desirable, have invested Rs 14 billion during the January-March quarter, down two per cent from Rs 20 billion in the same period in 2017. However, these investments rose 280 per cent over Rs 3.72 billion made during the immediately preceding quarter. 

Category-II funds, which invest in day-to-day operational requirements, pumped in Rs 44 billion during the quarter, up 12 per cent over Rs 39 billion in the same period last year. However, these investments funds were down 25 per cent compared to the Rs 58 billion investments made in the immediately preceding quarter.

Category-III funds, which employ diverse or complex trading strategies and may employ leverage including through investments in listed or unlisted derivatives, invested Rs 14 billion during the quarter ended March 2018, a 93 per cent increase compared to Rs 7.47 billion in the same period in 2017. However, investments by Category III funds fell 68 per cent compared to the immediately preceding quarter (Rs 45 billion).