PMS and AIF Advisory in Surat for High Net Worth Investors
Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) can add depth to a larger portfolio, but they come with higher minimums, different costs and real risks. We help you understand the options clearly before you decide.
Also see: Mutual Funds & SIP Equity Advisory Retirement Planning
What is a Portfolio Management Service (PMS)?
Portfolio management is the art and science of selecting and overseeing a group of investments that meet the long-term financial objectives and risk tolerance of a client, a company or an institution.
In a PMS, a SEBI-registered portfolio manager builds and manages a portfolio of stocks and other securities for you individually, based on a defined investment strategy. Your securities are typically held in your own account, so you can see exactly what you own. PMS is meant for investors with larger investable surplus, since SEBI sets a minimum investment amount for it.
PMS comes in three types: in discretionary PMS the manager takes investment decisions on your behalf, in non-discretionary PMS the manager takes decisions with your prior consent, and in advisory PMS the manager only advises and you execute.
A portfolio built for you
Your portfolio reflects your goals and risk appetite rather than a single scheme shared by all investors.
Professional management
Experienced portfolio managers research, select and monitor investments within a stated strategy.
Transparency
You can see the stocks held in your account and receive regular reports on holdings and performance.
Defined strategies
Strategies range from large-cap and multi-cap to focused and thematic approaches, each with its own risk level.
What is an Alternative Investment Fund (AIF)?
Beyond traditional equity, fixed income and cash, an AIF gives you access to non-traditional options such as private equity, venture capital, private debt, real estate funds and hedge funds. AIFs are privately pooled funds set up under SEBI regulations and are meant for high net worth individuals, family offices and institutional or corporate investors.
AIFs are classified into three categories:
Category I AIFs
These funds invest in start-ups and early-stage ventures, social ventures, SMEs, infrastructure and other sectors that are considered socially or economically desirable for the country. Venture capital and infrastructure funds fall here.
Category II AIFs
These include private equity funds and private debt funds. They invest in diversified portfolios according to a defined strategy, and generally do not use leverage other than for day-to-day operational needs.
Category III AIFs
These include hedge funds and other funds that use complex or diverse trading strategies. They may use leverage and derivative positions, which can increase both potential gains and potential losses.
PMS vs AIF at a glance
Both sit above the regular mutual fund shelf, but they work differently. This table is a general guide, and each product has its own terms.
| PMS | AIF | |
|---|---|---|
| Structure | Individual portfolio managed for each client | Pooled fund where investors hold units |
| Typical minimum | Generally ₹50 lakh per client | Generally ₹1 crore per investor |
| What you own | Securities held in your own account | Units in the fund |
| What it invests in | Mainly listed stocks and securities | Private equity, venture capital, debt, real estate, hedge strategies and more |
| Liquidity | Usually easier to exit, subject to the agreement | Often close-ended with a fixed tenure, so money can be locked in for years |
| Transparency | You can see your holdings | Reports are periodic, and you do not own individual holdings directly |
| Often suits | Investors wanting a focused, personalised equity portfolio | Investors seeking access to non-traditional assets and who can stay invested long term |
Minimum amounts are set by SEBI and may differ for accredited investors. Rules can change, so we confirm the latest requirement with you before you invest.
Are PMS and AIF right for you?
These products are not for everyone. We start by checking whether they fit your situation, and if they do not, we will say so and suggest simpler options such as mutual funds.
They may suit you if
- You have a sizeable investable surplus beyond your emergency and near-term needs
- You understand and can accept market risk and the possibility of losses
- You have a long investment horizon
- You want exposure beyond traditional equity and debt
- You are comfortable reading detailed disclosure documents
Think carefully if
- You may need the money in the short term
- The minimum investment would be a large part of your net worth
- You are uncomfortable with lock-ins or with performance that can vary widely
- You are attracted mainly by past performance numbers
- You have not yet built a base of mutual funds, insurance and emergency savings
Understand before you commit
- Suitability first: we look at your goals, risk appetite, liquidity needs and overall portfolio
- Plain-language explanation: strategy, fees, lock-ins and risks, so there are no surprises
- Review of the documents: we help you read the disclosure document or placement memorandum
- Onboarding support: we guide you through KYC, agreements and paperwork
- Ongoing review: we help you track how the investment fits your wider plan over time
Four simple steps
Understand
We discuss your goals, existing investments, liquidity needs and comfort with risk.
Shortlist
If PMS or AIF suits you, we shortlist options and explain strategy, costs, lock-ins and risks.
Onboard
We help with KYC, agreements and documents so you can invest without hassle.
Review
We review progress with you regularly and see how the investment fits your wider plan.
PMS and AIF questions we hear most often
What is the minimum investment in PMS and AIF?
Under current SEBI rules, a PMS generally requires a minimum investment of ₹50 lakh per client, and most AIFs require a minimum commitment of ₹1 crore per investor. Accredited investors may be eligible for different thresholds. Rules can change, so we confirm the current requirement with you before you invest.
What is the difference between PMS and a mutual fund?
A mutual fund pools money from many investors into one scheme with common holdings. A PMS builds a portfolio of securities for you individually, held in your own account, usually with a higher minimum investment and different fee structures. Mutual funds are open to investors at much lower amounts.
What is the difference between PMS and AIF?
A PMS manages a portfolio of securities for each client separately. An AIF is a pooled fund in which you hold units alongside other investors, and it can invest in areas such as private equity, venture capital, real estate and debt. AIFs are often less liquid and can have longer lock-in periods.
Are returns from PMS or AIF guaranteed?
No. PMS and AIF investments are subject to market and other risks, and returns are not guaranteed. You can lose part or all of your capital, which is why these products are meant for investors who understand and can afford the risk.
What is an accredited investor?
Accredited investor is a category defined by SEBI for individuals and entities that meet certain income, net worth or asset criteria and are verified by an accreditation agency. Accredited investors may get access to some relaxations, such as different minimum investment amounts. Please speak to us to check whether you may qualify.
Can I withdraw my money whenever I want?
It depends on the product. With a PMS you can usually exit as per the terms of your agreement, and exit charges may apply. Many AIFs are close-ended, which means your money is locked in for a fixed tenure that may run for several years. Always check the liquidity terms in the disclosure document.
What fees are charged in PMS and AIF?
Fee structures vary by manager and product. They commonly include a management fee, and may include a performance fee above a set return level, along with other operating costs and exit charges. We explain the fee structure in plain language before you commit.
How are PMS and AIF investments taxed?
Tax treatment differs between PMS and AIF, and also between AIF categories, and tax rules can change. Please consult a qualified tax professional for advice that applies to your situation.
Thinking about PMS or AIF?
Speak to a VR Capittal advisor to understand the options, costs and risks. The first conversation is free.
Disclaimer: Investments in PMS and AIF are subject to market and other risks, and returns are not guaranteed. You may lose part or all of your capital. These products are meant for investors who understand the risks and can afford to commit capital for the long term. Past performance is not indicative of future returns. Please read the disclosure document or private placement memorandum and all related agreements carefully before investing. Minimum investment amounts and regulations are set by SEBI and can change. VR Capittal is registered with the Association of Portfolio Managers in India (APMI) as a PMS distributor (APRN : 06608). The information on this page is general in nature and is not personalised advice.