Indian Venture Capital Association Shifts Focus to Domestic Capital Attraction

Indian Venture and Alternate Capital Association to Focus on Attracting Domestic Institutional Capital

The Indian Venture and Alternate Capital Association (IVCA), the industry body for venture capital, has announced its plans to draw more domestic institutional capital into alternative investment funds (AIFs). Despite the presence of structural bottlenecks that continue to slow participation, IVCA remains committed to promoting the growth of the alternative investment industry in India.

According to IVCA's strategy, the primary focus will be on attracting domestic institutional capital, including pension funds, insurance companies, and family offices, to invest in AIFs. This move is expected to boost the growth of the alternative investment industry, which has been experiencing a slowdown in recent times. In 2022, the Indian alternative investment industry witnessed a 12% decline in growth, with AIFs raising a total of $14.5 billion in the calendar year.

The IVCA's efforts will focus on addressing the structural bottlenecks that have hindered the participation of domestic institutional capital in AIFs. Some of the key challenges include the lack of awareness about alternative investments, regulatory hurdles, and inadequate infrastructure to support the growth of the industry. By addressing these challenges, IVCA aims to create a more conducive environment for domestic institutional capital to invest in AIFs.

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Comparison of AIFs in India

The IVCA's initiative is expected to have a positive impact on the growth of the alternative investment industry in India. By attracting more domestic institutional capital, AIFs will have access to a larger pool of funds, which will enable them to invest in more startups and growth-stage companies. This, in turn, will create more job opportunities and drive economic growth in the country.