As AIFs rise in popularity, PMS industry feels the heat

In May, PMS clients stood at 125,390, down 20,528 in 2 months: Sebi data

- KHUSHBOO TIWARI

Portfolio management services (PMS), catering to higher networth individuals (HNIS), are facing tough competition from emerging alternative investment funds (AIFs), evident from their dwindling client base. In May, the number of clients for the industry stood at 125,390, down 20,528 in two months, shows data from the Securities and Exchange Board of India (Sebi).

"PMS managers also have a high active ratio, which means their portfolios are quite differently positioned and more actively managed, compared to the benchmark, which is also a highlight for long-term investors. Last year was very challenging for PMS managers for generating alpha due to a variety of reasons and the complexity of index components driving it," says Akhil Chaturvedi, chief business officer, Motilal Oswal AMC.