Axis Asset Management Company expects its “Alternates” portfolio to grow fourfold over the next five years, driven by India’s rapidly expanding affluent base and its demand for sophisticated investment products such as alternative investment funds (AIFs), private equity and credit, and commercial real estate.
“My view is that this (Alternates) platform should see ₹25,000–30,000 crore of assets over the next five years,” B Gopkumar, MD & CEO, Axis Mutual Fund, said on Thursday.
Axis AMC is the country’s eighth-largest mutual fund house with total AUM of about ₹3.7 lakh crore, of which equities account for around ₹2.1 lakh crore and fixed income about ₹1.2 lakh crore.
The company entered the alternate investment space in 2019 and currently manages about ₹7,000 crore across AIFs, portfolio management services (PMS), private credit and private equity funds.
Private credit and real estate emerge as growth catalysts
According to Gopkumar, private credit will account for a significant share of the growth. “Our focus now is more on private credit. The industry has done very well over the last few years.”
Axis AMC deployed around ₹900 crore across nine private credit deals last year and plans to raise ₹2,000 crore. The platform focuses on manufacturing, electric vehicles and renewable energy sectors and areas where banks face end-use restrictions. Under private credit, the AMC typically looks at 14–14.5% yield.
HNI Focus
On Thursday, Axis Commercial Real Estate Fund (Axis CRE Fund), a Category II AIF, announced a collaboration with global real estate major Tishman Speyer to develop a 4 lakh sq ft Grade-A office project in Chennai’s FinTech City, conceptualised by Tamil Nadu Industrial Development Corporation.
Axis CRE Fund secured one of the first two plots through an auction for about ₹280 crore. This is the first investment from its Category II AIF. The fund is also developing a 9-lakh-sq ft commercial property, a ₹1,700-crore project, in partnership with Tishman Speyer in Pune’s Balewadi area,.
Gopkumar said the commercial real estate cycle over the past three years has been strong across categories A and B and even beyond. He added that private credit and commercial real estate have emerged as key investment avenues for high net worth individuals (HNIs), ultra-HNIs and family offices in India and overseas.
“We cover almost 380 family offices. India has more than 1,000 family offices. There will be at least 600 family offices with over ₹1,000-crore net worth,” he said, adding that these have become a large portion of the investing community in commercial real estate projects.
Axis CRE Fund follows a 5+2 structure, requiring exit within seven years of fundraising. It may explore exit opportunities through large pension funds or REITs. According to Gopkumar, a well-run commercial property could generate 22–23% internal rate of return.
Under private equity, Axis AMC has so far invested ₹1,500 crore in growth-stage startups, including marquee brands such as Lenskart, Ola, National Stock Exchange, Bikaji Foods and Gopal’s Snacks. It is set to close its fourth PE fund of ₹1,000 crore in December.
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