AIF inflows to cross $500 billion by 2030: Report

Private markets-focused alternative investment funds, or AIFs, have the potential to cross $500 billion in investments by 2030, led by a favourable regulatory regime and growing investor interest, said a report by CapHive, a technology platform for private capital markets.

AIFs - which are investment vehicles designed for ultra-wealthy individuals, coming with an entry barrier of minimum investment of ₹1 crore - already have over $90 billion in commitments. "The favourable regulatory regime in India will encourage more fund managers to shift their alternate investment funds to Gujarat International Finance Tec-City from global venues," said Ausang Shukla, founder and chief executive of CapHive.

India-focused AIFs' assets under management is expected to grow 18-25% every year till 2030, driven by increasing allocation from global institutions as well as stronger domestic flows, CapHive said.


AIFs invest a wide range of assets including pure equity and hybrid debt. Globally, comparable private market AUM are estimated to have crossed $12 trillion, growing at 20% CAGR over the last five years, the report said. In the next phase, GIFT City domiciled funds will start becoming vehicles for Indian capital to diversify their investments into global private markets, it said.

However, the authors of the report warned that uncertainty over regulations for funds and fund managers could have a negative impact on attracting AIFs to India. "The delicate balance that regulators have maintained between ensuring investor protection and encouraging innovation while giving the freedom needed for AIFs through light touch regulations will be important," they noted.