New Delhi, February 12 Domestic investors invested ₹1.14 lakh crore in AIFs from January 2023 to September 2025, indicating that the industry is building a capital base anchored locally, according to a report by Crisil.
Domestic investors accounted for 55.3 per cent of the capital in categories I and II of AIFs in September 2025, up from 50.3 per cent in March 2024, with an additional inflow of ₹1.14 lakh crore over the period, the report added.
"This indicates that 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.
The cumulative commitments to alternative investment funds (AIFs) across categories I, II, and III reached ₹15.05 lakh crore as of September 2025, with 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 the top quartile of funds made over 2 times the distributions to paid-in capital or DPI.
The report highlighted that there was a shift towards larger, quality deals, as transactions above ₹500 million accounted for 90 per cent of the 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," said Jiju Vidyadharan, Senior Director, Crisil Intelligence.
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.