Alternative Investment Fund commitments have risen to ₹11.78 lakh crore for the quarter ended June, a 4 per cent growth over the previous quarter, and a 40 per cent rise year-on-year, latest data from SEBI showed.
About 79 per cent of the commitments were from category II AIFs. Funds that do not fall in category I and III, and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements are classified as category II. These include real estate funds, private equity funds and funds of distressed assets.
Funds raised stood at ₹4.74 lakh crore, while investments made amounted to ₹4.32 lakh crore for the quarter ended June. Funds raised from domestic investors stood at ₹3.13 lakh crore, while that from foreign investors stood at about ₹2.1 lakh crore.
Cumulative net investment made in listed and unlisted securities stood at ₹1.15 lakh crore and ₹3.09 lakh crore, respectively. Over three fourths of the investment in listed securities was done by category III AIFs.
Cumulative net investment made in equity and equity linked securities amounted to ₹2.68 lakh crore, and that in debt securities ₹1.21 lakh crore. Cumulative net investment in real estate at ₹74,347 crore was the most among sectors. IT and Financial Services attracted ₹25,313 crore and ₹24,594 crore, respectively.
Investment in start-ups for the quarter amounted to ₹16,246 crore.
Sophisticated strategies
AIFs have a minimum ticket size of ₹1 crore and aim to offer investors access to sophisticated strategies across different asset classes.
Given the rich valuations in the listed space, investors are looking at alternatives such as structured credit, venture capital, private equity funds, real estate funds and long-short strategies in category III, all of which may have little correlation with long equities, said experts.