AIF commitments surge past ₹14 trn; funds raised, deployment exceed ₹5 trn

Commitments to AIFs rose 20% year-on-year to Rs 14.2 trillion as of June 2025, with funds raised at Rs 6 trillion and investments made at Rs 5.72 trillion

With rising inclination from ultra high-networth individuals and family offices, the total commitments for alternative investment funds (AIFs) surged to ₹14.2 trillion as of June 2025, recording a 20 per cent jump year-on-year and a 5 per cent growth on a sequential basis.

 

The total funds raised also inched closer to ₹6 trillion while total investments made stands at ₹5.72 trillion, according to data by the Securities and Exchange Board of India (Sebi).

 

AIFs are pooled investment vehicles catering to the niche segment with high entry investments. Recently, the market regulator has pushed for accreditation among investors for certain schemes.

 

According to experts, AIFs have gained traction given its ability to diversify investments in early stage startups, unlisted assets, and complex trading strategies. 

 

Category II AIFs focusing on private equity, debt, and other unlisted assets, continued to dominate the segment with highest commitments at ₹10.78 trillion.

 

However, there is a rising inclination towards category III AIFs which include hedge funds. 

 

According to the report by the industry association IVCA, category III accounted for 47 per cent of the total launches in the current financial year.

 

In terms of investments, real estate accounts for nearly 12.5 per cent of the total investments, highest among all other sectors, followed by financial services, IT, NBFCs, and banks.

 

Last month, the RBI announced easing norms on investments by its regulated entities such as banks and NBFCs in AIFs by capping the cumulative exposure in schemes at 20 per cent and 10 per cent by a single entity in the scheme’s corpus.

 

Industry players believe that the move will facilitate more investments after an earlier direction had curtailed inflows amidst concerns of evergreening of loans.

 

Additionally, the Reserve Bank of India has excluded equity instruments as part of downstream investment made by regulated entities (REs) in AIFs from the purview of provisions.