Alternative Investment Funds have outgrown the quiet corner of Indian finance. Commitments to AIFs now stands at ₹17.53 lakh crore. Of this, around ₹7.11 lakh crore is deployed as of end-June 2026.
At that scale, the commissions are no longer small change, and the question of who earns them is not academic. The awkward fact at the centre is that many of the largest managers also own the wealth desks that sell to the same clients. The shop and the shelf sit under one roof.
Wealth manager 360 ONE, whose shares are publicly traded, is widely described by equity analysts as part manufacturer, part distributor. Nuvama’s investor material presents its asset management arm as sold through its own wealth business plus distributors. Bank-led houses such as Kotak run private wealth franchises alongside alternatives arms.
The model is legal. The conflict though is built in. The same house earns from making the fund and from selling it.
Securities and Exchange Board of India’s (SEBI) 2023 reforms partly addressed this. Every AIF scheme must offer a direct plan with no distribution fee. An investor already paying an adviser or portfolio manager must come in through it. Category III funds can pay distributors only through equal trail, out of the manager’s own fee. Category I and II funds may still pay up to one-third upfront. The rest is spread across the fund’s life. SEBI insists investors must be told the total cost at onboarding.