Domestic Investors Pumped ₹1.14 Lakh Crore into AIFs in 18 Months: Report

Domestic investors pumped Rs 1.14 lakh crore into AIFs in 18 months to September 2025, reflecting that the industry is building a locally-anchored capital base, a report by Crisil said.

Domestic investors accounted for 55.3 per cent of category I and II AIF capital in September 2025, up from 50.3 per cent in March 2024, with an incremental inflow of Rs 1.14 lakh crore over the period intervening, the report added.

"That indicates the industry is building a more self-sustaining, locally anchored capital base, reducing its reliance on foreign capital," according to the third edition of 'No Ifs About AIFs', a benchmark-led assessment of India's AIF ecosystem by Oister Global and Crisil Limited.

Cumulative alternative investment fund (AIF) commitments across Categories I, II and III reached Rs 15.05 lakh crore as of September 2025, clocking a compound annual growth rate of 30.7 per cent between fiscal 2021 and the first half of fiscal 2026, it highlighted.

On the outcome, the report said that as of March 2025, nearly 80 per cent of benchmarked equity AIF schemes made distributions, around 25 per cent returned full paid-in capital and top quartile funds made over 2 times distributions to paid-in capital or DPI.

The report highlighted that there was a shift toward larger, quality deals as transactions above Rs 500 million accounted for 90 per cent of total deal value in fiscal 2025, reflecting investor preference for scaled, governance-ready businesses.

"AIFs are poised to be one of the fastest-growing managed product categories as investors seek differentiated, long-term return drivers. Greater participation from domestic institutional investors, such as retirement and insurance funds, will be a key growth lever," Jiju Vidyadharan, Senior Director, Crisil Intelligence, said.

Sandeep Sinha, Co-CEO and co-founder, Oister Global, said, "Across seven benchmarking cycles through March 2025, unlisted equity AIFs generated an average alpha of about 8.69 per cent over the BSE Sensex Total Return Index".

"This reinforces private markets as a source of differentiated returns, not just leveraged market exposure," Singh added.