6 out of 10 discretionary equity PMS outperform benchmark: APMI

The Indian Portfolio Management Services industry shows mixed performance outcomes, with APMI data revealing that while a majority of discretionary equity managers outperform benchmarks, substantial performance divergence exists within the sector. As of May 2026, 57.6% of the 543 discretionary equity PMS schemes analyzed have outperformed their respective benchmarks and delivered alpha to investors over a five-year investment horizon. This translates to approximately 6 out of 10 schemes generating positive alpha, indicating that discretionary management approaches have broadly justified fee structures for the majority investor base. However, the inverse statistic is noteworthy: 42.4% of schemes have underperformed their benchmarks, raising questions about manager selectivity and the persistence of performance differentials in the sector.

The discretionary equity PMS segment represents the dominant portion of India's PMS industry by assets, managing Rs. 4.12 lakh crore—equivalent to 68.3% of total industry AUM of Rs. 6.03 lakh crore (excluding EPFO contributions). This substantial capital base underscores the importance of performance outcomes for institutional investors and high-net-worth individuals relying on active management strategies within the Indian equity market.

Performance concentration among leading managers is pronounced. Varanium Capital Advisors' G2G India Portfolio significantly outpaces competitors, delivering five-year returns of 69.14% and generating alpha of 59.27% relative to the Nifty 50 TRI benchmark. Aequitas Investment Consultancy's India Opportunities Product follows with 38.16% returns and 28.29% alpha, while Green Lantern Capital's GLC Growth Fund achieves 34.86% returns and 22.57% alpha over the BSE 500 TRI. Additional top-10 performers include ICICI Prudential Asset Management's India Recovery Strategy (34.78% return, 22.49% alpha) and Counter Cyclical Investments' Diversified Long Term Value fund (32.56% return, 20.27% alpha). The performance gap between top-ranked and second-ranked schemes is substantial, with Varanium's alpha exceeding Aequitas by 31 percentage points, suggesting meaningful skill differentiation or systematic risk positioning among elite managers.

The broader dataset reveals that alpha generation remains concentrated in the upper percentile of managers. Only 7.5% of schemes achieve alpha exceeding 10%, while 3% of the industry underperforms their benchmark by less than 10%—a relatively tight clustering at the lower performance spectrum. This distribution pattern suggests that investor success in the PMS space is significantly dependent upon manager selection, with the majority of underperforming schemes likely failing to justify their management fees relative to passive alternatives or lower-cost benchmarks.