India’s alternative investment fund industry doubles to $72 bn in 5 yrs: Preqin report

India’s alternative investment fund (AIF) industry has doubled from $36 billion at the end of 2016 to $72 billion by September 2021 in assets under management for Securities and Exchange Board of India (SEBI) registered funds alone, stated a report by Preqin. 

The report titled ‘Benchmark Report for India Alternative Investment Funds’ found that Category I funds outperformed the MSCI India Total Return Index by 19 per cent because of strong venture capital returns. 

India-focused venture capital funds offer the highest median net IRR compared to the other asset classes at 18 per cent but have the highest standard deviation of net IRR at 34 per cent, it added.

The report comprises 296 schemes across AIF Category I, II, and III, for performance data as of 31 March 2021. These benchmarks provide a top-level overview on a range of indicators such as net internal rate of return (IRR), net multiple, called capital, distributions to paid-in-capital (DPI), and residual value to paid-in-capital (RVPI) on the dominant strategies employed by the managers. 

“With this, we are now able to provide transparency to various investors and managers, who are keen to tap on opportunities arising from India’s fast-growing alternative assets industry. The launch of this benchmark will help investors compare and measure fund performance of AIFs in India, and it further solidifies Preqin's commitment to the Asia-Pacific region,” said Geetanjali Bhalotia, SVP, APAC Head of Research at Preqin. 

The benchmark includes AIFs registered with SEBI. Categories I, II and close-ended PIPE funds are eligible for benchmarking if the scheme has completed a year from its first close up till March 2021. Category III and open-ended PIPE funds are eligible for benchmarking if they were incepted before March 2021. Angel funds and schemes without transactions are excluded. 

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