A Mint article on the topic suggests that the cumbersome processes for investors in Portfolio Management Services (PMS) – including vis-a-vis paying taxes directly (instead of via the fund manager), opening and maintenance of separate demat accounts, etc – are leading High Network Individuals (HNIs) to prefer investing in public markets via Category III Alternative Investment Funds (AIFs), despite the higher minimum ticket sizes required (INR 1 crore for an AIF vs INR 50 lakh for a PMS). The fact that such AIFs can also pick up stakes in unlisted companies (of up to 25% of their AUMs) is making them even more attractive, the article points out.
