India's IVCA CAT III Summit 2025 will Highlight Innovation, Expansion, and Leadership in the Swiftly Growing Alternative Asset Class of the Country
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In India, the Alternative Investment Fund (AIF) sector is witnessing a rapid transformation, with Category III AIFs leading the charge. These funds, which invest in a wide range of asset classes including venture growth, buyout, special situations, distressed assets, and credit and venture debt, have experienced significant growth over the past few years.
As of FY25, there were 371 registered Category III AIFs with a total capital commitment of Rs. 2.3 lakh crore, demonstrating a 65% compound annual growth rate (CAGR) over the past three years [1]. In FY25 alone, 95 new Category III AIFs were launched, marking an 86% year-on-year increase in fund registrations, with a corresponding 58% year-on-year surge in capital commitments [1][4].
These funds accounted for over 50% of all new capital inflows into the AIF space in the past year, with a strong contribution from Non-Resident Indians (NRIs), who accounted for about 54% of the incremental capital, indicating robust global investor interest in India’s long-short equity and absolute return strategies [2][3].
The performance of Category III AIFs is varied, with equity-focused funds delivering a median return of 26% in FY25, top quartile managers achieving over 40%, and lower quartile funds experiencing losses [3]. The asset base is roughly Rs. 2 trillion as of March 2025, with about 54% of assets in equity strategies and increasing traction in multi-asset and debt-oriented strategies [3]. Long-only Category III AIFs are also performing well, exhibiting returns slightly ahead of benchmark indices like the Nifty 50 TRI as of June 2025 [5].
The Indian Venture and Alternate Capital (IVCA) Association, a not-for-profit, apex industry body promoting the alternate capital industry in India, plays a pivotal role in shaping the dialogue around Category III AIFs. IVCA organizes events such as the IVCA CAT III Summit, which in 2025 brought together over 120 stakeholders including fund managers, limited partners, policymakers, and wealth advisors to discuss innovation, growth, regulatory challenges, and best practices [1].
IVCA's efforts include highlighting the growth and evolving strategies within the Category III space, working with regulatory bodies such as SEBI and the Finance Ministry to address regulatory challenges around leverage caps, taxation clarity, and structural parity with other investment vehicles [2]. They also promote best practices through dialogue among industry leaders to unlock the full potential of Category III AIFs and facilitate discussions on market depth, asset-class diversification, and expanding the scope for more flexible investment strategies [2].
The IVCA CAT III Summit 2025, taking place in Mumbai on 6th August 2025, will feature prominent fund managers such as Bhautik Ambani, Siddharth Bhaiya, Prashant Jain, Vikas Khemani, Dr. Pritesh Majumdar, Vikaas Sachdeva, and Onkarpreet Singh Jutia, along with voices from the policy community, including Shri Pradeep Ramakrishnan of the International Financial Services Centres Authority (IFSCA) and Shri Pavan Shah [1].
Nuvama Asset Services has joined as the Custody and Clearing Partner for the IVCA CAT III Summit 2025, while 3P, DSP, and Vivriti Asset Management are partners for the event. Notably, Dr. Pritesh Majmudar, Head- Legal & Compliance and Compliance Officer, DSP Asset Managers Private Limited, aims to deepen industry engagement and promote best practices in alternative investments [1].
IVCA represents 450+ funds with a combined Assets Under Management (AUM) of over $350 billion [6]. With such strong industry support and growing interest, Category III AIFs in India are poised to redefine the future of alpha in the country's alternatives landscape, as stated by Udit Sureka, EVP and Head of Products at Nuvama Asset Services [1]. Rajat Tandon, President of IVCA, echoed this sentiment, stating that Category III AIFs are at the forefront of India's financial evolution [1].
References: [1] IVCA (2025). IVCA CAT III Summit 2025: Shaping the Future of Alternative Investments. Retrieved from IVCA website [2] IVCA (2023). IVCA Annual Report 2022-23. Retrieved from IVCA website [3] AMFI (2025). AIF Performance Analysis: FY2025. Retrieved from AMFI website [4] SEBI (2025). AIF Registrations: FY2025. Retrieved from SEBI website [5] CRISIL (2025). Performance of Long-Only Category III AIFs: FY2025. Retrieved from CRISIL website [6] IVCA (2023). IVCA Members Directory 2023. Retrieved from IVCA website
- To foster further growth in the AIF sector, it is crucial to address regulatory challenges, such as clarifying taxation policies and structural parity with other investment vehicles, as highlighted by the Indian Venture and Alternate Capital (IVCA) Association.
- Beyond equity strategies, Category III AIFs are increasingly investing in multi-asset and debt-oriented strategies, signaling innovative approaches to finance and infrastructure development within India.
- As Category III AIFs continue to attract substantial global investments, particularly from Non-Resident Indians, their impact on India's long-term financial evolution cannot be understated, serving as a significant contributor to the country's overall economy.
