IVCA CAT III Summit Charts Course for the Future of CAT III AIFs in India

India’s apex industry body for alternative assets, the Indian Venture and Alternate Capital Association (IVCA), is set to host the IVCA CAT III Summit in Mumbai on July 11th, 2024. The IVCA CAT III Summit aims to catalyse growth in the CAT III AIF space, bringing together over 300 industry stakeholders consisting of CAT III funds, other alternative capital funds, limited partners (LPs), family offices, wealth managers, policymakers, regulators, and IVCA member knowledge partners. The IVCA CAT III Summit boasts a prestigious line-up of sponsors, including AlphaGrep Investment Management, Nippon Life India AIF Management, Northern Arc, PwC and Sundaram Alternatives.

IVCA CAT III Summit Charts Course for the Future of CAT III AIFs in India

Bhautik Ambani, Chief Executive Officer, AlphaGrep Investment Management, and Co-Chair, CAT III Council, IVCA, said, “IVCA CAT III Conclave 2024 will be a fantastic event focusing on the Indian alternative capital industry. The event will focus on engagement with regulators, initiatives for CAT III AIFs, and increasing interest from family offices and high-net-worth individuals, which are crucial for the industry’s growth and development. It’s great that the conclave will provide a platform for thought-provoking discussions and networking opportunities to delve deeper into these important topics. Collaboration and innovation are key drivers of progress in any industry, and it’s clear that the IVCA Conclave aims to foster these connections to shape the future of the alternate capital industry in India. Im sure the conclave will offer a wealth of insights and opportunities for all participants. Enjoy the event and make the most out of the connections and knowledge shared there!”

Ashish Chugani, Head Alternative Assets, Nippon India Alternative Investments said, “The strong and growing interest in AIFs amongst investors has made it the fastest growing asset class in India in recent times. While majority of the AIFs fall under Category II, the growth of Category III AIFs has been quite phenomenal. Within Category III AIFs, Long-Only funds have consistently remained the largest segment, as their popularity and performance has been growing steadily. However, we do believe that given the dynamic nature of the markets, Long-Short funds are seen as a harbour for managing market volatility and generating higher risk-adjusted returns. The Indian Economy is well poised to grow exponentially, and we believe Category III AIFs are yet to reach their true potential. As differentiated investment themes and strong alpha will propel investors interest in Long-Only Funds, diversification and volatility management will induce increasing interest towards Long-Short funds.”

Bhavdeep Bhatt, CEO, Northern Arc Investments said, “Indian capital market has been going from strength to strength in terms of building strong regulatory infrastructure, and an unprecedented depth, breadth & liquidity. This set up offers a perfect opportunity for financial market innovations, particularly for sophisticated large investors who demand global standard in terms of differentiated product design for risk-return. Thankfully, Cat III framework helps harnessing this opportunity across asset classes. No wonder, the CAT III AUM has grown @ 100% + CAGR in last decade. While tax neutrality will help the investor and industry more, we are happy to have offered a unique Money Market Alpha Fund, an open-ended-money-market-credit-Fund that has delivered 9.5% CAGR, post expense, since its inception 5.5 year ago, without any delay or delinquency, including during Credit or Covid crisis.”

Gautam Mehra, Partner, PwC India said, “The assets under management of Category III funds have seen a significant growth trajectory. On the back of an ever-growing increase in the depth and maturity of Indian capital markets, this segment can continue to play a very important role in funneling long-term capital through a well-regulated environment. Additionally, the Summit provides a great platform to brainstorm on financial innovation and on increasing the coverage of a wider range of products which would serve the requirements of Indias markets and economy, and at the same time, cater to the needs of the more sophisticated investors.”

Vikaas Sachdeva, Managing Director, Sundaram Alternatives & Co-Chair, CAT III Council, IVCA said, “Category III AIFs in India are at the forefront of financial innovation, presenting a diverse array of strategies including long-only, long-short equity, absolute return, market neutral, arbitrage, and credit. These funds aim to deliver superior risk-adjusted returns. As they continue to navigate various asset classes, market capitalizations, and sectors with expertise, Category III AIFs are poised to secure a significant share of investor portfolios, shaping the future of HNI investment in India. The key to their success lies in consistently meeting risk and return expectations, which bolsters investor confidence and drives growth. Their role in diversifying and enhancing portfolio performance will be instrumental in attracting a broader investor base. The evolution of Category III AIFs signals a transformative phase in Indias investment landscape.”

The Category III Alternative Investment Fund Report 2024, to be released at the summit, projects a promising future for CAT III AIFs. It anticipates an exponential growth trajectory, with CAT III AIFs having demonstrated a compound annual growth rate (CAGR) of 8% and 52% over the past five and three years, respectively. As of December 2023, there are 257 registered CAT III AIFs, with collective commitments of a staggering Rs. 128,058 crore. Notably, CAT III funds are the only category that witnessed a significant rise in the number of new funds launched in FY24.

The IVCA CAT III Summit features a prestigious lineup of speakers. Several industry veterans from the alternate capital ecosystem will participate in various panel discussions. These include prominent figures such as – Akshaya Mishra, Head of Compliance, Nuvama Asset Management, Apurva Salarpuria (Principal, Salarpuria Family Office), Ashish Chugani (Head – Alternative Assets, Nippon India Alternative Investments), Bhautik Ambani (CEO, AlphaGrep Investment Management, and Co-Chair, CAT III Council, IVCA), Bhavdeep Bhatt (CEO, Northern Arc Investments), Nalin Moniz (CIO – Alternative Equity, Edelweiss Asset Management), Pavan Shah (General Manager, IFSCA), Pradeep Ramakrishnan (Executive Director, IFSCA),Pritesh Majmudar (Head of Compliance, DSPIM), Saurabh Rungta (Managing Director and Chief Investment Officer, Avendus Wealth Management), Upasana Koul (Co-founder and Director, Eleveight), Vikaas Sachdeva (Managing Director, Sundaram Alternates, and Co-Chair, CAT III Council, IVCA), and Vikram Bohra (Partner, Price Waterhouse & Co LLP)

About IVCA

The Indian Venture and Alternate Capital Association (IVCA) is a not-for-profit, apex industry body promoting the alternate capital industry and fostering a vibrant investing ecosystem in India. IVCA is committed to supporting the ecosystem by facilitating advocacy discussions with the Government of India, policymakers, and regulators, resulting in the rise of entrepreneurial activity, innovation, and job creation in India and contributing towards the development of India as a leading fund management hub. IVCA represents 45% of overall AIFs in the country and its members are the most active domestic and global VCs, PEs, funds for infrastructure, real estate, credit funds, limited partners, investment companies, family offices, corporate VCs, and knowledge partners. These funds invest in emerging companies, venture growth, buyout, special situations, distressed assets, and credit and venture debt, among others.