PMS Industry Could Grow Over 20% CAGR as Investment Participation Deepens: SEBI Chairman

As India's investment universe expands, portfolio management services (PMS) could potentially grow at more than 20 per cent annually, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Wednesday. Speaking at 3rd annual investor conference of the Association of Portfolio Managers in India (APMI), Pandey said several components of India's investment universe have been growing at rates of more than 15 per cent, creating scope for PMS to expand at a faster pace.

According to him, most of the components of the investing universe in India have been growing at over 15 per cent CAGR. In fact, PMS can go over 20 per cent, he said. However, the SEBI chairman did not present the figure as a formal growth projection but highlighted the potential for investment products as wealth creation and investor participation increase. He also noted that the PMS industry also needs to establish its role in an increasingly diverse investment landscape, where products such as mutual funds and alternative investment funds (AIFs) serve different categories of investors.

"Let's not discount the fact that we have other means. They have a mutual fund industry and AIF. These are components that are meeting different kind of clientele. They do not necessarily compete with each other," Pandey said. PMS caters to a niche segment that includes high-net-worth individuals, while passive investment products can appeal to investors who place greater emphasis on costs, he said. PMS provides professionally managed investment portfolios to investors and is positioned differently from mass-market investment products such as mutual funds. He stressed that the PMS industry would need to communicate its distinct value proposition and build investor confidence as competition and choice in the investment market increase.

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