PMS & AIF
What is PMS?
Portfolio Management Services (PMS) are investment solutions offered by SEBI-registered entities to manage high-net-worth individuals’ (HNIs) portfolios. Unlike mutual funds, PMS offers customized strategies, direct stock ownership, and active management.
| Feature | Details |
|---|---|
| Regulatory Body | SEBI (Securities and Exchange Board of India) |
| Minimum Investment | ₹50 lakh (as per SEBI guidelines since Nov 2019) |
| Ownership | Direct ownership of securities |
| Customization | Tailored to investors’ goals, risk profile, and time horizon |
| Transparency | Detailed reports on holdings and performance |
 Types of PMS
PMS strategies vary based on management style and investment philosophy:
| Type | Description | Ideal For |
|---|---|---|
| Discretionary PMS | Portfolio manager takes all decisions on behalf of the client | Investors seeking expert control |
| Non-Discretionary PMS | Client approves decisions; manager offers advice | Investors wanting involvement |
| Active Management | Aims to outperform benchmarks via stock selection and timing | High-risk, alpha-seeking clients |
| Passive Management | Mimics index performance (e.g., Nifty 50) | Conservative investors |
 Who should consider the PMS?
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PMS is ideal for investors who:
- Want customized, actively managed portfolios
- Prefer direct stock ownership over pooled mutual funds
- Are comfortable with higher minimum investment and market-linked risk
📘 What is AIF?
Alternative Investment Funds (AIFs) are privately pooled investment vehicles that invest in non-traditional asset classes such as private equity, venture capital, hedge funds, real estate, and structured debt. Regulated by SEBI under the AIF Regulations, 2012, AIFs are designed for sophisticated investors seeking diversification beyond mutual funds and public equities.
Key Features:
| Feature | Details |
|---|---|
| Regulatory Body | SEBI (Securities and Exchange Board of India) |
| Legal Structure | Trust, LLP, Company, or Corporate Body |
| Minimum Investment | ₹1 crore (₹25 lakh for employees/directors of the fund) |
| Investor Profile | HNIs, Institutions, Accredited Investors |
🧠Types of AIFs in India
| Category | Description | Typical Investments | Risk-Reward Profile |
|---|---|---|---|
| Category I | Invests in sectors considered socially/economically beneficial | Startups, SMEs, Infrastructure, Social Ventures |
Risk: High Reward: Potentially high returns over long term |
| Category II | Includes funds not under Category I or III; no leverage allowed | Private Equity, Debt Funds, Structured Credit |
Risk: Moderate Reward: Stable medium-to-high returns |
| Category III | Uses complex strategies; leverage permitted | Hedge Funds, PIPE (Private Investment in Public Equity) |
Risk: High to Very High Reward: High potential with volatility |
📊 Risk Management & Diversification
AIFs offer diversification across asset classes and geographies, helping investors reduce concentration risk. However, each category carries its own risk profile:
- Category I: Illiquid, long gestation, but high upside if ventures succeed
- Category II: More predictable cash flows, lower volatility
- Category III: Market-sensitive, requires active monitoring and risk controls
🧠Who should consider the AIF?
AIFs are ideal for investors who:
- Seek exposure beyond traditional equity and debt instruments
- Are comfortable with higher minimum investments and longer lock-in periods
- Want tailored strategies aligned with their risk appetite and return expectations
Choosing the right AIF category depends on your financial goals, liquidity needs, and tolerance for volatility. If you’d like help comparing top-performing AIFs or visualizing their historical returns, we’d be happy to assist!