Axis AMC Aims for Fourfold Growth in Alternates to ₹30,000 Crore, Driven by Private Credit and CRE
Axis Asset Management Company (AMC) is setting an ambitious target to grow its “Alternates” portfolio fourfold over the next five years, driven by India’s rapidly expanding affluent base and the increasing demand for sophisticated, specialized investment products.
B Gopkumar, MD & CEO of Axis Mutual Fund, projects that the alternates platform should reach ₹25,000–30,000 crore in assets over the next five years. This represents a massive scale-up from the company’s current ₹17,000 crore managed across Alternative Investment Funds (AIFs), Portfolio Management Services (PMS), private credit, and private equity funds.
Key Growth Drivers
Axis AMC, currently India’s eighth-largest mutual fund house (with an AUM of ₹3.7 lakh crore), is strategically focusing on two high-growth segments within its alternates business:
1. Private Credit Focus
Strategic Priority: Gopkumar emphasized that Private Credit will account for a significant share of this growth, noting the segment has “done very well over the last few years.”
Activity & Strategy: Last year, Axis AMC deployed around ₹900 crore across nine private credit deals and plans to raise ₹2,000 crore more. The focus is on providing structured financing where banks face restrictions, targeting:
Sectors: Manufacturing, Electric Vehicles (EVs), and Renewable Energy.
Yield: The AMC typically targets a high yield of 14–14.5% under its private credit strategy.
2. Commercial Real Estate (CRE)
Axis AMC is actively developing its presence in commercial real estate, which has seen a strong cycle over the past three years.
Flagship Project: The Axis Commercial Real Estate Fund (Axis CRE Fund), a Category II AIF, announced a collaboration with global major Tishman Speyer.
New Development: Their first investment through the AIF is a 4 lakh sq ft Grade-A office project in Chennai’s FinTech City, secured for about ₹280 crore.
Returns & Exit: A well-run commercial property is expected to generate a high 22–23% Internal Rate of Return (IRR). The fund follows a 5+2 structure, exploring exit opportunities through large pension funds or REITs within seven years.
Tapping the HNI and Family Office Base
The explosive growth in alternates is inextricably linked to India’s burgeoning affluent investor base.
HNIs & Family Offices: Private credit and commercial real estate have emerged as key investment avenues for HNIs, Ultra-HNIs, and family offices both domestically and overseas.
Market Potential: Gopkumar noted that Axis AMC covers almost 380 family offices. Given that India has over 1,000 family offices, with at least 600 having a net worth of over ₹1,000 crore, this segment represents a large and growing pool of capital driving commercial real estate investments.
Update on Private Equity
Under its private equity arm, Axis AMC has invested ₹1,500 crore in growth-stage startups (e.g., Lenskart, Ola, NSE) and is set to close its fourth PE fund of ₹1,000 crore in December.
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