Finance & Wealth

#4 Things to Keep in Mind While Committing Your Wealth to an Alternative Investment Fund Manager

By Vanita D'souza | Jul 27, 2021
Finance & Wealth| Achiever Network

As wealth continues to grow in the country, investors have started to look at new shores to support their growth trajectory. This is one of the main reasons why a fairly new asset class - alternative investment funds (AIFs) have gained significant traction in the country.

The asset class, which was launched in 2012, presently has over 500 funds registered within the segment. According to SEBI, as of June 2018, AIFs have got commitments worth INR 179585 crores and have raised nearly INR 97611.73 crores. On the other side, these funds have invested close to INR 74892.

Considering the trend will continue and AIFs will continue to get more commitments, here are few things investors should keep in mind while parking money in these funds:

Be Aware

AIFs have been around for merely six-seven years, so before committing to a fund, understand the asset and whether it marries your goals.

Umang Papneja, Senior Managing Partner and Chief Investment Officer, IIFL Wealth says, “The advice is similar for any investment – be clear on your investment goal and investment horizon. If the product suits your time horizon and investment needs, only then evaluate and invest in these products.”

The Fees

While evaluating an asset class, investors often ignore the fee structure looking at the lovely returns portrayed to them by the fund managers.

But Raghvendra Nath, Managing Director of Ladderup warns them about this ignorant behaviour and recommends investors to critically evaluate the free structure.

“Understand if the