PMS vs AIF

PMS or AIF? How the two actually differ.

Both are SEBI-regulated routes for larger investments, run by professional managers. They differ in who owns the investments, what they can invest in, how money goes in and comes out, and how they are taxed.

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At a glance

PMS minimum: ₹50 lakh
AIF minimum: ₹1 crore for most investors
Accredited investors: Exempt from both minimums
PMS ownership: Securities in your own demat account
AIF ownership: Units of a pooled fund
Our role: We distribute both; the managers run them

Based on rules as of November 2026. Actual terms vary by manager, fund and strategy.

What it is

A PMS manages a portfolio for you alone. Shares and bonds are bought in your name and held in your own demat account, so you can see every holding and every trade.

An AIF pools money from many investors into one fund. You own units of the fund, and the manager can invest in things a PMS usually cannot, such as unlisted companies, private credit or real estate.

Neither is better or safer in itself. The useful comparison is between specific strategies, their costs, their liquidity and your time horizon.

Side by side

A summary of typical features. Each PMS Disclosure Document and each AIF Private Placement Memorandum (PPM) sets out the actual terms.

Swipe to compare →

PMSAIF

Who manages itA SEBI-registered portfolio manager, for you individuallyThe investment manager of a SEBI-registered fund, for all its investors

What you ownThe securities themselves, in your own demat accountUnits of the fund, held in demat form

Minimum₹50 lakh, in cash or securities₹1 crore for most investors

What it can holdMainly listed shares and bondsUnlisted companies, private credit, real estate, or long-short strategies (by category)

How money goes inUsually all at the startOften in stages, through capital calls

Getting money outUsually possible at any time; exit charges may apply in the first 3 yearsCategory I and II: locked in for the fund’s life, at least 3 years. Category III: per the fund’s terms

FeesFixed, performance-linked, or bothManagement fee, and often a performance share (carried interest)

TaxTaxed in your hands on each sale and dividendCategory I and II: most income taxed in your hands. Category III: generally taxed at the fund level

What you seeEvery holding and trade, in regular statementsPeriodic reports and valuations

PMS

Who manages it: A SEBI-registered portfolio manager, for you individually
What you own: The securities themselves, in your own demat account
Minimum: ₹50 lakh, in cash or securities
What it can hold: Mainly listed shares and bonds
How money goes in: Usually all at the start
Getting money out: Usually possible at any time; exit charges may apply in the first 3 years
Fees: Fixed, performance-linked, or both
Tax: Taxed in your hands on each sale and dividend
What you see: Every holding and trade, in regular statements

AIF

Who manages it: The investment manager of a SEBI-registered fund, for all its investors
What you own: Units of the fund, held in demat form
Minimum: ₹1 crore for most investors
What it can hold: Unlisted companies, private credit, real estate, or long-short strategies (by category)
How money goes in: Often in stages, through capital calls
Getting money out: Category I and II: locked in for the fund’s life, at least 3 years. Category III: per the fund’s terms
Fees: Management fee, and often a performance share (carried interest)
Tax: Category I and II: most income taxed in your hands. Category III: generally taxed at the fund level
What you see: Periodic reports and valuations

New PMS rules from 1 April 2027

The SEBI (Portfolio Managers) Regulations, 2026, notified on 7 October 2026, replace the 2020 regulations from 1 April 2027.

₹50 lakh minimum stays
For conventional PMS. Accredited investors remain exempt.
A mutual-fund-only route
A separate PMS route that invests in mutual fund units, with a ₹25 lakh minimum.
A wider investment menu
Portfolio managers will be able to invest in IPOs and primary debt issues and, with your consent, in specified foreign securities.

Is it for you?

May be worth exploring if you…

Can invest ₹50 lakh (PMS) or ₹1 crore (AIF) without needing it soon
Already hold a broad base of mutual funds
Understand that returns are not guaranteed and can be negative
Want to read the Disclosure Document or PPM before deciding

Pause and consider if you…

May need this money within a few years (especially for Category I and II AIFs)
Would find capital calls at short notice hard to meet
Prefer simple, daily-priced products
Are comparing only past returns, without costs and risks

This is general information, not an assessment of your suitability, which depends on your circumstances and the specific scheme or product.

Safeguards

Both regulated by SEBI: PMS under the Portfolio Managers Regulations; AIFs under the AIF Regulations, 2012
PMS securities held in your own name, through a custodian
AIF assets held with a custodian and valued by an independent valuer
A Disclosure Document (PMS) or Private Placement Memorandum (AIF) before you invest
Regular statements or reports to investors

Regulation and risk labels do not guarantee returns or prevent losses.

Risks & costs to know

Market risk: both can fall in value; returns are not guaranteed
Liquidity: AIFs, especially Category I and II, can lock money in for years
Concentration: both may hold fewer investments than a typical mutual fund
Manager risk: results depend heavily on the manager’s decisions
Costs: fees and performance shares reduce what you keep

Have a concern?Our service: escalation matrix · A fund, scheme or issue: its provider first · Still unresolved: SEBI SCORES or SMART ODR

How we help

1Step 1
Listen
We understand your goals, time horizon, existing holdings and comfort with risk.
2Step 2
Explain options
We set out relevant options from regulated providers, with costs, liquidity and risks side by side.
3Step 3
You decide, we coordinate
Once you decide, we help with KYC, paperwork and onboarding with the provider.
4Step 4
Review
Supported holdings appear in our app, and we review them with you as markets and life change.

You decide whether to invest, in what, and on what terms. How we are paid for each product is disclosed before you invest. See how we’re paid →

Common questions

Short answers to what families ask us most. For anything specific to your situation, talk to us.

Still have a question?Mon–Fri, 8:00 AM – 6:00 PM · Sat, 9:00 AM – 3:00 PM IST

All FAQs →Contact us →

Can I invest in both?

Yes, if you meet each minimum. Some families use a PMS for listed equity and an AIF for private or alternative strategies.

Which is less risky?

Neither in itself. Risk depends on the specific strategy, how concentrated it is, whether it uses leverage, and how long your money is locked in.

Can NRIs invest in PMS or AIFs?

Yes, subject to FEMA and each provider’s terms. PMS usually needs a PIS-enabled account for repatriable investing. See our NRI guide at /nri.

What is an accredited investor?

An investor certified by an accreditation agency as meeting SEBI’s income or net-worth tests. Accredited investors are exempt from the ₹50 lakh PMS and ₹1 crore AIF minimums.

What about SIF?

A Specialized Investment Fund is a mutual-fund-house product with a ₹10 lakh minimum per PAN, per fund house. It can follow long-short strategies within SEBI limits.

Comparing PMS and AIF options?

We’ll set out the specific strategies, costs, liquidity and risks side by side. You decide.

PMS and AIF investments are subject to market risks and are suitable only for eligible investors. Read the Disclosure Document, Private Placement Memorandum and client agreement carefully before investing.

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