Foreign investors once viewed exits as one of the weaker links in India's alternative investment fund (AIF) ecosystem. That perception has shifted, according to former SEBI chairman UK Sinha. Speaking at the CII Alternative Investment Fund Summit, he said developments over the past two years had demonstrated that the industry could deliver strong exits for both domestic and foreign investors, with India's track record stronger than that of many other markets.
Sinha recalled that limited and uncertain exit opportunities had been a frequent complaint, particularly among overseas investors seeking clarity on how and when they could realise their investments.
"The developments in the last two years have also proven that your industry can provide excellent exits to domestic as well as foreign investors," he said.
While foreign investors' decisions to return in larger volumes depend on several factors, he added, the exit environment itself was no longer the constraint it once was.
The improvement in exits forms part of a broader transformation that Sinha traced over the past decade and more. When the AIF regulations were introduced in 2012, few anticipated the scale the industry would reach by 2026. It now ranks second only to mutual funds in the quantum of capital mobilised, ahead of pension funds, Employees' Provident Fund Organisation (EPFO) flows, infrastructure investment trusts (InvITs), real estate investment trusts (REITs) and municipal bonds.