Real estate sector accounted for the largest share (15%) of cumulative net AIF investments, with Rs 73,903 crore invested in real estate out of an all-sectors total of Rs 5,06,196 crore, according to Anarock.
The rise of Alternate Investment Funds (AIFs) has significantly transformed real estate financing in India, offering a crucial lifeline to projects struggling with lack of funding and unlocking new opportunities for developers.
AIFs - privately pooled funds that invest in non-traditional assets like private equity, hedge funds, and real estate - offer niche, high-risk, high-reward opportunities suited for experienced investors.
Other sectors benefiting from AIF investments include IT/ITeS, Financial Services, NBFCs, Banks, Pharma, FMCG, Retail, Renewable Energy, and others
At the end of 9M FY25, AIF investments in real estate rose from Rs 68,540 crore by FY 2024-end to Rs 73,903 crore- an appreciable 8% growth in first three quarters of fiscal year 2025.
“Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development. Since they pool capital from domestic and foreign investors, AIFs are a sustainable and scalable funding ecosystem,” said Prashant Thakur, regional director, Anarock.
The number of AIF active in the market has grown 36-fold over the past decade - from 42 by 31st March 2013 to a 1,524 AIFs as of 5th March 2025, with commitment raised increasing five-fold since 2019. Between FY2013 and FY2025, the commitment raised in AIFs has seen an impressive 83.4% compounded annual growth rate (CAGR).
This surge in commitments is mainly fuelled by Category II AIF, which is contributing almost 80% over the last five fiscal years. Domestic investors continue to hold the majority share in AIF fundraising activities; however, Category II AIFs exhibit a notable balance with foreign portfolio investors (FPIs) having an almost equal participation.
“The SWAMIH Fund, India's flagship AIF and arguably the most prominent, has helped revive numerous stalled projects with liquidity infusions of over Rs 35,000 crore to date,” said Anuj Puri, chairman, Anarock.
The rise of Alternate Investment Funds (AIFs) has significantly transformed real estate financing in India, offering a crucial lifeline to projects struggling with lack of funding and unlocking new opportunities for developers.
AIFs - privately pooled funds that invest in non-traditional assets like private equity, hedge funds, and real estate - offer niche, high-risk, high-reward opportunities suited for experienced investors.
Other sectors benefiting from AIF investments include IT/ITeS, Financial Services, NBFCs, Banks, Pharma, FMCG, Retail, Renewable Energy, and others
At the end of 9M FY25, AIF investments in real estate rose from Rs 68,540 crore by FY 2024-end to Rs 73,903 crore- an appreciable 8% growth in first three quarters of fiscal year 2025.
“Amidst increasing constraints on traditional funding sources, AIFs are an agile and innovative financing mechanism to address capital gaps at various stages of real estate development. Since they pool capital from domestic and foreign investors, AIFs are a sustainable and scalable funding ecosystem,” said Prashant Thakur, regional director, Anarock.
The number of AIF active in the market has grown 36-fold over the past decade - from 42 by 31st March 2013 to a 1,524 AIFs as of 5th March 2025, with commitment raised increasing five-fold since 2019. Between FY2013 and FY2025, the commitment raised in AIFs has seen an impressive 83.4% compounded annual growth rate (CAGR).
This surge in commitments is mainly fuelled by Category II AIF, which is contributing almost 80% over the last five fiscal years. Domestic investors continue to hold the majority share in AIF fundraising activities; however, Category II AIFs exhibit a notable balance with foreign portfolio investors (FPIs) having an almost equal participation.
“The SWAMIH Fund, India's flagship AIF and arguably the most prominent, has helped revive numerous stalled projects with liquidity infusions of over Rs 35,000 crore to date,” said Anuj Puri, chairman, Anarock.
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