CRISIL MI&A Research today launched its alternative investment fund (AIF) benchmarks for September 2022, including three new sub-category-level ones: real estate funds–residential, distressed asset funds (both in Category II), and hybrid funds (in Category III).

The new benchmarks add to a list of already available sub-category-level benchmarks introduced in June 2022.

With this, CRISIL provides peer comparison for AIFs in ten sub-categories within three broad AIF categories — I, II and III (listed below) to aid investors in performance analysis and evaluation.

Says Jiju Vidyadharan, Senior Director, CRISIL Market Intelligence & Analytics, “As the Indian AIF industry continues to evolve, there is a need for enhanced alignment of benchmarks with underlying strategies. A slew of funds have been registered in the past few years, with more investor interest. Commitments have risen ~43% between June 2021 and June 2022 to Rs 6.95 lakh crore. Against this backdrop, our newly added sub-category AIF benchmarks will enable nuanced and closer comparison of funds in these categories.”

In Category II, real estate funds–residential aims to build a diversified portfolio comprising mostly residential assets. Distressed asset funds invest in financially distressed opportunities that have the potential to turn around. Funds can invest via equity or debt securities. In Category III, while long-only and long-short equity funds lean towards capital appreciation and capital preservation, respectively, through exposure to equity and its derivatives, hybrid funds follow a balanced approach of investing in both equity and debt based on the market cycles.