CRISIL Research has launched a sub-category-level benchmark for the domestic Alternative Investment Fund (AIF) industry. These benchmarks will cover seven sub-categories within three broad AIF categories – Cat I, Cat II and Cat III, and enable more granular comparison of peer funds within each category for use by investors, intermediaries and AIFs.
The sub-categories for which benchmarks have been created are Venture Capital Funds (under Cat-I), Equity Funds – Unlisted, Equity Funds – Listed + Unlisted, Real Estate Funds and Debt Funds (all under Cat-II) and Long-only equity funds and long-short equity funds (both under Cat III).
According to the press release, the benchmarks are in line with the guidelines of the Securities and Exchange Board of India and are based on consultation with industry participants.
The benchmarks for this report have been calculated as on March 31, 2021. All AIFs registered under SEBI (Alternative Investment Fund) Regulations are considered for computing the benchmark, provided they have completed one year since the first closing date on March 31, 2021. Also, only those old years in which at least three schemes are available.
Based on the sub-category benchmarking exercise, it was found that Equity Funds – Listed + Unlisted have the largest assets 49,500 crore, followed by long-only equity funds 33,600 crores.
On the basis of performance, Equity Fund – Listed + Unlisted and Debt Fund were the toppers among the funds for FY 2019 and FY 2020 respectively. Also, debt funds of all the earlier years outperformed the CRISIL Composite Bond Fund Index. The vintage year is defined as the financial year in which the scheme was first closed.
Moreover, long-only equity funds underperformed long-short equity funds in the three- and five-year periods. Notably, the long-short equity fund benchmark has delivered no negative returns for a rolling return period of three or five years since its inception in September 2015.