In an exclusive interview, we ask Amit Goenka, the founder, CEO, and managing director of Nisus Finance, about the rise of alternative investments and how the financial landscape has changed
In an exclusive interview with ET Edge Insights, Amit Goenka highlighted that the landscape of alternative investments began in 2012, when SEBI introduced the alternate funds regime. Over the past 10 years, the Alternative Investment Funds space (AIF) has experienced an annual growth rate of 105%. Currently, the AUM (Assets Under Management) stands at around seven lakh crores, which is a significant size compared to the wider, deeper, and older mutual funds industry with an AUM of 37 lakh crores. It is anticipated that the AIF industry will reach or even surpass that number in the next decade, clearly showcasing the importance of the industry today.
Goenka identified two key driving factors behind this growth: The increase in per capita income, leading to a greater desire to invest; and the availability of a wide portfolio of products. People are now willing to explore digital assets, digital currencies, pre-IPO stocks, hedge funds, structured credit, and other avenues that offer substantial returns, providing a wide range of opportunities that were previously unavailable through traditional financial methods.
Goenka emphasised what investors should be cautious about and where they should focus their attention in terms of emerging trends. From a consumer or investor standpoint, it is important to consider the track record and the level of personal investment by the fund manager. He highlighted that one of the most significant driving factors for the success of alternative investments is the mandatory requirement for managers to invest their own money before others.
Furthermore, he underscored the role of technology in the AIF industry. Technology has enabled real-time access to information and the ability to engage with chatbots for queries. It has become a powerful tool for obtaining real-time information, utilising cloud-based computing and analytics to assess the performance of individual transactions and portfolios as a whole.
Discussing the current global geopolitical condition, its impact on India, and its investment strategies, Amit Goenka emphasised that governance has become a major focus for all credit funds and investment managers from a central bank and regulatory standpoint. The world is looking to use India as a manufacturing and consumption base, attracting more capital. This presents an opportunity for alternative investments to come to the forefront and participate in these growth opportunities, playing to their advantage.
Watch this insightful interaction to gain a further understanding of how alternative investments are shaping the future of the financial landscape and how investors can capitalise on these emerging trends.