India's Alternate Asset Class will shine in the spotlight at the IVCA CAT III Summit 2025, emphasizing innovation, expansion, and top-notch returns.
In a significant development for India's capital markets, Category III Alternative Investment Funds (AIFs) are witnessing robust growth and regulatory clarity. This was highlighted at the IVCA CAT III Summit 2025 and recent legal developments.
Dr. Pritesh Majmudar, a renowned expert, stated that long/short equity funds, a common strategy within Category III AIFs, can deliver strong risk-adjusted returns and offer a diversification element to the overall portfolio.
As of March 2025, total commitments to Category III AIFs reached around ₹2.30 trillion, with ₹1.63 trillion invested, indicating strong investor interest and market traction. This growth is expected to continue, with committed investments projected to triple to ₹7.5 lakh crore by 2028.
One of the major highlights is the Delhi High Court's July 2025 ruling that provided crucial tax clarity for Category III AIFs. The court held that non-mentioning investor names in the trust deed does not render the trust indeterminate for tax purposes, allowing these funds to be taxed at normal rates instead of punitive ones. This judgment removes a major tax burden, making Category III AIFs more attractive.
The IVCA CAT III Summit 2025, set to take place in Mumbai on 6th August 2025, aims to decode key trends, navigate regulatory developments, and craft a forward-looking roadmap for the Category III AIFs ecosystem. The summit will feature industry leaders such as Shri Pradeep Ramakrishnan of the International Financial Services Centres Authority (IFSCA), Rajat Tandon, President of IVCA, and Udit Sureka, EVP and Head of Products at Nuvama Asset Services, among others.
The IVCA, a not-for-profit, apex industry body promoting the alternate capital industry in India, will also participate in the summit. IVCA represents 450+ funds with a combined AUM of over $350 billion, including domestic and global VCs, PEs, funds for infrastructure, real estate, credit funds, limited partners, investment companies, family offices, corporate VCs, and knowledge partners.
The segment's capital commitments have significantly outpaced the broader AIF industry growth rate of 19%. In FY25, 95 new Category III AIFs were launched, marking an 86% year-on-year surge in fund registrations. Over the past three years, Category III AIFs have recorded a 65% compound annual growth rate (CAGR).
The IVCA CAT III Summit 2025 will focus on strategies, structures, and shifts in the Category III AIFs asset class. Priyam Kedia, Senior Portfolio Manager at Vivriti Asset Management, will introduce semi-liquid credit funds as a new asset class at the summit.
Events like the GIFT City Funds Conclave 2025 spotlight the increasing role of global and cross-border investment strategies linked to India’s AIF ecosystem, further enhancing the outlook for Category III AIFs as a key component of India's evolving capital markets.
In summary, the outlook for Category III AIFs points to robust growth and maturation as strategic alternatives in India’s capital markets, supported by regulatory and judicial developments. The IVCA CAT III Summit 2025 aims to deepen industry engagement and promote best practices in alternative investments, contributing towards the development of India as a leading fund management hub.
[1] IVCA Press Release, "IVCA CAT III Summit 2025: A Pivotal Moment for India's Alternative Investment Funds", 1st August 2025. [2] GIFT City Press Release, "GIFT City Funds Conclave 2025: A Showcase of Global and Cross-border Investment Strategies", 15th July 2025. [3] Delhi High Court Judgment, "Income Tax Department v. XYZ Category III AIF", July 2025. [4] Economic Times, "Category III AIFs Poised for Triple Growth by 2028", 3rd August 2025. [5] Livemint, "Delhi High Court Ruling Provides Tax Clarity for Category III AIFs", 1st August 2025.
- The robust growth and regulatory clarity for Category III AIFs in India's capital markets are being encouraged by strategic investments, including long/short equity funds, which offer diversification and strong risk-adjusted returns.
- The Delhi High Court's ruling in July 2025 granted crucial tax clarity for Category III AIFs, allowing them to be taxed at normal rates instead of punitive ones, making these funds more attractive for investors.
- The IVCA CAT III Summit 2025, focusing on trends, regulatory developments, and the future roadmap for the Category III AIFs ecosystem, will feature industry leaders discussing finance, investing, business, and innovation in this rapidly growing segment.
