Co-investment may slip its leash as rules relax for big-ticket plays

Regulatory changes could give further momentum to a segment that has gained increasing traction since 2022.

- SACHIN P MAMPATTA

Co-investment under the portfolio management services (PMS) route accounted for less than ₹50 crore in assets and involved fewer than a dozen clients for much of 2022. Since then, assets under management have risen to ₹3,812 crore across 535 clients as of April 2025, according to the latest regulatory data. The recent changes may open the door to greater investment from sovereign wealth and pension funds, experts say.

Co-investment is a practice followed by alternative investment funds (AIFs), which often pool money from wealthy investors to allocate to startups and other unlisted firms. Illustratively, if a startup aims to raise $250 million, an AIF may invest $200 million and then enable its investors to put in the remaining $50 million individually, over and above their contribution to the AIF. The Securities and Exchange Board of India (Sebi) formalised co-investment via the PMS route in December 2021.