Published 18 August 2026 · By the PCJ Desk · about 7 min read · General educational information, not investment advice.
Once portfolios grow, many investors look beyond mutual funds to PMS (Portfolio Management Services) and AIFs (Alternative Investment Funds) — both regulated by SEBI, both aimed at high-net-worth individuals (HNIs). They offer more concentrated or specialised strategies, with higher minimums and different structures. Here is a plain-English comparison.
What is PMS?
PMS is a professionally managed portfolio of stocks (or other securities) held in your own name and demat account. A SEBI-registered portfolio manager makes the buy/sell decisions per a chosen strategy. The regulatory minimum investment is ₹50 lakh. You get transparency into individual holdings and a tailored mandate — see PMS.
What is an AIF?
An AIF is a pooled fund (like a private, sophisticated version of a mutual fund) that invests per a defined strategy — Category I (start-ups/infra/social), Category II (private equity, debt, real estate) or Category III (hedge-fund-style long-short public-market strategies). The regulatory minimum is ₹1 crore. You own units of the fund, not the underlying securities directly.
PMS vs AIF vs mutual funds
Ownership: PMS — securities in your own demat; AIF — units of a pooled fund; mutual fund — units, but far lower minimums. Minimum: PMS ₹50 lakh, AIF ₹1 crore, mutual fund from ₹500. Customisation: highest in PMS; AIFs follow the fund’s fixed strategy. Access: mutual funds are for everyone; PMS/AIF are for HNIs comfortable with concentration and lower liquidity.
Structure, fees and taxation
Both PMS and AIF typically charge a management fee and sometimes a performance fee. Taxation differs by structure — in PMS, gains are taxed in your hands as capital gains on each transaction; AIF taxation depends on the category (some are pass-through). Because this is nuanced and changes, confirm the specifics for the product and your situation with a tax adviser before investing.
How to choose
Start from your goal, risk appetite, liquidity needs and horizon. PMS suits those who want a transparent, customised equity portfolio in their own name; AIFs suit those seeking a specific alternative strategy (private credit, long-short, etc.) and can lock up capital. Both carry higher risk and lower liquidity than mutual funds — and past performance never guarantees future returns.
Frequently asked questions
What is the minimum for PMS and AIF?
SEBI sets a ₹50 lakh minimum for PMS and ₹1 crore for AIF.
Is my money safer in PMS or AIF?
Both are SEBI-regulated but carry market risk and less liquidity than mutual funds; “safer” depends on the strategy and manager, not the wrapper.
Do I own the shares in PMS?
Yes — in PMS the securities are held in your own name/demat; in an AIF you hold units of the pooled fund.
Where PCJ fits. PCJ distributes PMS and AIF products of SEBI-registered portfolio managers and fund managers and helps you evaluate suitability through PCJ Wealth Management — PCJ does not manage these portfolios itself, and this is general information, not investment advice.