has urged the to slash the minimum investment limit for from ₹50 lakh to ₹25 lakh or lower, citing slowing growth and intensifying competition from newer investment vehicles.
Sources said that the industry association has recently made representations to the market regulator as the high entry barrier has limited PMS access to only the wealthiest investors. SEBI had doubled the minimum threshold from ₹25 lakh to ₹50 lakh in January 2020.
“PMS has unique advantages such as customised mandates and direct ownership of securities. But with a ₹50-lakh entry point, we are losing potential clients to SIFs and even mutual funds,” said a senior PMS executive aware of the discussions.
Increased competition
Since April, the industry has faced a fresh challenge with the launch of Specialised Investment Funds (SIFs) — a category designed for high-net-worth and sophisticated investors but requiring only ₹10 lakh as the minimum investment.
SIFs combine flexible strategies with stronger safeguards compared to PMS and Alternative Investment Funds (AIFs), making them a compelling alternative, as per analysts.
Quant Mutual Fund has become the first asset management company to receive SEBI’s approval under the new framework, and plans to launch the first product—qsif Equity Long-Short Fund—in September.
Several other mutual fund houses are in the process of securing the regulator’s approval for the SIF segment and are getting ready to launch schemes under the new asset class.
The mutual fund industry is also working on building capacity, teams, strategies and distribution for the new category. MF industry sources have hinted at a higher investment threshold for SIFs for better margins and to be able to compete with PMS and AIFs.
KYC simplification
Apart from lowering the ticket size, APMI has also asked the regulator to simplify know-your-customer (KYC) norms for non-resident investors, another source said. The current two-factor authentication and country-specific verification hurdles can stretch onboarding timelines to several weeks for many market participants.
Earlier this month, SEBI chairman Tuhin Kanta Pandey said the regulator is working with APMI on reforms, but stressed that the industry must ensure clients understand both risks and bespoke benefits before investing. He also cautioned PMS providers against exaggerated performance claims as such practices erode investor trust.
The PMS industry comprises around 470 SEBI-registered managers, collectively overseeing about ₹3.8 lakh crore in assets. However, assets under management (AUM) remain concentrated, with large firms such as ASK Investment Managers and Marcellus handling a sizable share.