A tectonic shift is underway in the wealth management industry. As mutual funds and other traditional investments come of age, alternative investment funds have started resonating with the uber rich. The wealthy are looking for investment avenues beyond asset allocation. They are seeking out advisers who can provide them structured philanthropy, art, Pre-IPO deals, distressed assets, infrastructure and structured credit and more.
Sensing the exponential demand for such asset classes, Securities and Exchange Board of India put in place regulations aimed at facilitating capital into private equity (PE), venture capital, infrastructure, real estate, private credit, and hedge funds, in 2012. Since then, close to 600 AIFs have sprung up. The appetite from HNIs is only increasing. AIFs have raised commitment worth Rs 2.82 lakh crore as on March 2019. Of this, 72 % or Rs 2.05 lakh crore was raised in category II funds. What can be done to boost the growth of other categories of funds like infrastructure, social venture, venture capital and SME Funds? A recent clarification by Central Board of Direct Taxes (CBDT) states that profits earned by foreign investors from investments made outside the country but routed through Alternative Investment Funds (AIFs) will not be taxed in India. This is a big win for India’s startup investment community.
What more can be done to bring AIFs into mainstream investing? How can advisers gear up to cater to the appetite for these complex investment vehicles from their clients? At the forthcoming Morningstar Investment Conference, our distinguished panel of AIF experts will debate on some of the most pressing issues AIFs are grappling with and the opportunities these funds hold for advisers.
View agenda here.