How Does SEBI’s AIF Performance Benchmarking Framework Strengthen Transparency?

As India’s Alternative Investment Fund (AIF) industry continues to grow, SEBI has introduced a detailed Performance Benchmarking Framework to bring greater transparency, comparability and investor confidence into the ecosystem. The underlying goal is to make performance reporting consistent across funds and to ensure that investors have access to data presented in a uniform and meaningful manner.

Under this framework, all AIFs are now required to benchmark their scheme performance against relevant peer groups within the industry. To enable this, SEBI has appointed three Benchmarking Agencies—CRISIL, Preqin and NSE—as the primary institutions responsible for collecting data and generating benchmarking reports.

Every AIF must share its scheme level data with all three agencies, although subscribing to at least one of them is sufficient to receive the official benchmarking report. These agencies must also clearly explain the methodology used for benchmarking, including how individual scheme performance and overall industry benchmarks are calculated. Benchmarking will take place twice a year, using data as of September 30 and March 31, and all reporting will be based on pretax Net Asset Value (NAV). AIFs themselves must meet detailed data submission requirements. All schemes that have completed at least one year from their First Close must submit scheme-wise cash flow details, valuation information, and the valuation methodology along with the name of the valuation agency. Data as of September 30 must be submitted within 45 days and may be unaudited, while data as of March 31 must be submitted within six months and must be audited. This ensures both timely reporting and an annual layer of validated accuracy.

The Benchmarking Agencies play a crucial role beyond just data aggregation. They are responsible for collecting information from all AIF categories—Category I, II and III—and creating industry benchmarks dating back to 2012. These benchmarks are published in both INR and USD, allowing for global comparability. In addition, the agencies may also generate specialized benchmarks based on instrument type, fund vintage, sector focus and fund tenure, enabling more nuanced performance insights for both fund managers and investors.

SEBI has also mandated the use of these benchmarking reports in all investor communications. Every AIF must include its specific benchmarking report in quarterly or annual newsletters, Private Placement Memoranda (PPM) and any marketing material related to existing or new schemes. This ensures investors always review fund performance in a standardized format that is consistent across the industry, ultimately fostering confidence and enabling more informed investment decisions.

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The information herein is meant only for general reading purposes, and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data, and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision.

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