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The Securities and Exchange Board of India’s (Sebi’s) decision to allow portfolio management services (PMS) companies to invest in foreign securities could unlock a new growth lever for the industry, provided they can find professionals with expertise in managing global portfolios. Demand for diversification beyond Indian markets is rising, but building teams with the expertise to invest across geographies, currencies and regulatory regimes will take time, as few Indian funds currently invest overseas. “The talent exists, but experienced professionals who combine global market knowledge with the needs of Indian PMS clients are a relatively small pool,” said Anshul Sharan, co-founder and chief executive at quantitative PMS firm Ametra Investment Managers Pvt. Ltd. The capital markets regulator, at its 24 September meeting, approved a new regulatory framework for PMS that, among other measures, allows discretionary and non-discretionary PMS firms to invest in foreign securities, such as listed equity and debt, overseas mutual funds, exchange-traded funds, index funds and so on. Sharan said that to tap the opportunity, PMS firms would need people who can analyse companies across jurisdictions, navigate different accounting and regulatory frameworks, and manage currency and portfolio allocation risks. That talent could come from across the financial services industry, including mutual fund teams with overseas mandates, global research teams at asset managers, international wealth management businesses, and professionals who have worked with asset managers in Singapore, London, or the US. “The ecosystem will need to evolve and grow. A lot of mutual fund managers handling overseas assets may decide to become PMS managers. PMS firms can also build strong relationships with global firms that may also help with it,” said Shobhit Mathur, co-founder at wealth-tech and portfolio management platform Ionic Wealth. Deja vu A similar talent challenge emerged with Sebi’s newly launched specialized investment funds (SIFs), which make use of a long-short trading strategy, one that was not frequently utilized in the Indian markets, leading to a dearth of fund managers up for recruitment. Although not all PMS managers agree that talent will be a major constraint. Vikas Gupta, CEO and chief investment strategist at OmniScience Capital Advisors Pvt. Ltd, said there is already a sizable pool of professionals who could adapt to the requirements of overseas investing. “I think enough foreign-educated MBAs, etc., are there in India. Also, Indian MBAs can easily adapt to this, but need the mindset. Finally, the largest talent pool would be the GCCs (global capability centres) of the foreign banks in India,” said Gupta. PMS overhaul The overseas-investment provision is part of a wider overhaul of the PMS regulatory framework. The regulator has approved the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026, replacing the 2020 regulations, with the aim of developing the PMS industry, easing compliance, consolidating provisions and removing redundant requirements. The board has allowed PMS managers to invest in initial public offerings (IPOs) and primary-market debt issuances. Discretionary PMS can invest up to 10% of a client’s assets under management in investment-grade, non-convertible unlisted debt securities. Investment flexibility in exchange-traded derivatives has also been increased to up to 1.25 times a client’s AUM. The new framework introduces the Portfolio Managers Route for Investing in Mutual Fund units (PRIM), allowing portfolio managers to invest clients’ funds in direct plans of mutual funds, including ETFs, index funds and SIFs. The revamp is expected to accelerate growth in a segment that has come under pressure from newer investment products. Mint reported on 5 August that SIFs threatened the growth of PMS firms by emerging as a preferred investment option for high-net-worth individuals. Assets under PMS have grown by 12.1% to ₹44.11 trillion as of July 2026, compared with June 2026. However, a majority of this AUM, worth ₹31.9 trillion, comes from Employees' Provident Fund Organization (EPFO) mandates.
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