Portfolio management services (PMS) business is hard to expand, given the limited number of rich individuals and high investment ticket sizes. By contrast, a mutual fund business is much easier to scale, as the investment size is much smaller and thus accessible to the masses. This explains portfolio managers’ rush for seeking mutual fund licences from the Securities and Exchange Board of India (Sebi).
Founded by Sunil Singhania, former chief investment officer of Reliance Mutual Fund, Abakkus Asset Manager is India’s eighth-largest Portfolio Management Services (PMS) provider and has assets worth ₹18,010 crore under PMS, as per data from the Association of Portfolio Management Services (APMI).
Its total assets under management (AUM) are at ₹32,542 crore, including PMS, Alternative Investment Fund (AIF), and the private equity business. The firm currently offers three PMS strategies, five AIFs, and one private equity fund.
Retail push grows
According to a person aware of the discussions, the plans are at a nascent stage and Abakkus’ management has not yet made up its mind on how to go about it. A second person who did not wish to be named said that going from portfolio management — designed for high networth individuals — to mutual funds where retail investors have a bigger share of the pie is a logical progression. Both the persons here are not among those cited earlier.
An email sent to Abakkus remained unanswered till press time.
Retail investors in equity, hybrid, and solution-oriented schemes accounted for 79% of the 235 million investor accounts in the mutual fund industry as on 30 April, as per Association of Mutual Funds of India (AMFI) data. These investors accounted for 57% of the average mutual fund assets under management as on April 30.
Equity mutual fund schemes invest the majority (at least 65% in India as per Sebi regulations) of their assets in stocks. Hybrid schemes invest in a mix of asset classes, mainly equity and debt, but can also include gold or other assets. Solution-oriented schemes are designed to help investors meet specific financial goals like retirement, children’s education, or marriage.
PMS firms follow trend
Abakkus Asset Managers’ entry into the mutual fund segment aligns with a growing trend among PMS and AIF players seeking to expand into the broader mutual fund industry. India’s mutual funds industry has seen a rush of investments in recent years, with assets managed by such funds growing from ₹30 trillion in November 2020 to ₹69.5 trillion in April 2025
Experts pointed to certain benefits that mutual funds enjoy over others.
“The mutual fund industry benefits from improved market sentiment, higher financial literacy, and growing retail participation through SIPs,” said Raj Gaikar, equity research analyst, SAMCO Securities.
He added that the increase in digital adoption and diversification into passive and international funds will further contribute to the growth of the mutual fund industry.
More players join in
Saurabh Mukherjea’s Marcellus Investment Managers also applied for a mutual fund licence on 30 January, according to Sebi filings. The firm has since received in-principle approval, said Pramod Gubbi, co-founder at Marcellus Investment Managers.
“Within six months, we must demonstrate that we have the required personnel, systems, and processes in place in accordance with Sebi’s regulatory standards. Sebi will then decide on final approval based on our readiness,” said Gubbi.
Marcellus plans to launch equity mutual funds focused on businesses with strong competitive advantages, prudent capital allocation, and transparent accounting practices.
Meanwhile, ASK Investment Managers, the ninth largest PMS with an AUM of ₹17,943 crore, has also received an in-principle approval from Sebi to start a mutual fund. It has a total AUM of over ₹25,000 crore.
“Portfolio managers are increasingly shifting towards mutual funds because there is a limit to how much one can scale the PMS in terms of number of investors,” said Nimesh Mehta, chief business officer at ASK Investment Managers.
He added that PMS can be compared to a high-end vehicle like a Mercedes, where there are limited buyers due to high ticket sizes. “In contrast, mutual funds are like bikes—accessible to the masses and scalable across smaller towns. Just as lakhs of bikes sell compared to a few high-end cars, mutual funds enable broader market penetration. We have around 2 lakhs PMS folios versus 23 crore MF folios in India,” Mehta added.
Tax perks boost appeal
That apart, Deepak Shenoy’s Capitalmind PMS has also received Sebi’s’s in-principle approval on February 4. Capitalmind has three PMS strategies and one AIF fund. Other firms, including AlphaGrep Securities Private Ltd and Monarch Networth Capital, have also submitted mutual fund licence applications. These applications are currently under review by Sebi and are yet to receive in-principle approval, data from the market regulator showed.
Bhautik Ambani, chief executive officer of quantitative trading and investment firm AlphaGrep Investment Managers, highlighted that mutual funds are far more operationally convenient for investors compared to PMS.
“With mutual funds, an investor simply signs once and they are ready to start,” said Ambani.
In contrast, PMS requires extensive documentation and onboarding formalities. He also pointed out that mutual funds are more tax-efficient. “In PMS, the investor bears the tax burden every time the portfolio manager buys or sells a security. But in mutual funds, tax is incurred only at the time of redemption,” Ambani said.
Others making the switch
There are others too. Unifi Capital, initially a PMS player, received Sebi approval in November 2024 to launch a mutual fund. It introduced its first scheme, the Unifi Dynamic Asset Allocation Fund, in March this year. Similarly, Prashant Khemka’s WhiteOak Capital Management began as a PMS before acquiring Yes Mutual Fund in 2021. The firm now manages 19 mutual fund schemes, as per data from independent investment research firm Value Research.
As of March, the total AUM of the PMS industry stood at ₹5.1 trillion, as per Association of Portfolio Management Services, while the total commitments raised by category III AIFs was at ₹2.3 trillion, as per Sebi. In comparison, the mutual fund industry manages net assets of ₹69.9 trillion, as per data from AMFI.
