JM Financial Asset Management AIF assets triple to Rs 1,063 crore

JM Financial Asset Management reported AIF assets under management of Rs 1,063 crore, including commitments, in Q2FY27, 3.2 times the Rs 331 crore in Q2FY26, while mutual-fund average assets under management declined 9.4% to Rs 13,500 crore and folios fell to 8.5 lakh.

Why did Asset Management AIF assets rise to Rs 1,063 crore?

Asset Management’s alternative investment fund, or AIF, assets under management rose by Rs 732 crore year on year to Rs 1,063 crore in Q2FY27. The Q2FY27 total comprised Rs 700 crore in equity AIF assets and Rs 363 crore in debt AIF assets, compared with Rs 331 crore of equity AIF assets and no reported debt AIF assets in Q2FY26.

The reported AIF amount includes commitments, which affects the interpretation of the Rs 1,063 crore figure. Asset Management said its maiden Pre-IPO fund secured commitments of Rs 700 crore at its first close in Q2FY27, while the AIF table reported Rs 700 crore in equity assets including commitments.

Asset Management identifies channelising wholesale expertise into the AIF platform as a business priority. The Rs 363 crore debt AIF amount in Q2FY27 shows that the platform had added a debt category since Q2FY26, when the disclosed AIF base consisted entirely of Rs 331 crore in equity assets.

How did Asset Management mutual-fund assets and folios change?

Asset Management’s mutual-fund average assets under management, or MF AAUM, declined by Rs 1,402 crore to Rs 13,500 crore in Q2FY27 from Rs 14,902 crore in Q2FY26. Equity remained the largest category at Rs 10,856 crore, while debt assets were Rs 387 crore and liquid and other assets were Rs 2,257 crore.

Equity MF AAUM fell by Rs 834 crore, liquid and other assets declined by Rs 533 crore, and debt assets reduced by Rs 35 crore between Q2FY26 and Q2FY27. The fall was therefore spread across all three reported MF categories rather than being limited to one category.

Mutual-fund folios reduced to 8.5 lakh in Q2FY27 from 9.3 lakh a year earlier, a decline of 0.8 lakh. Asset Management also reported a systematic investment plan, or SIP, book of Rs 87 crore per month in Q2FY27, compared with Rs 90 crore per month in Q1FY27.

Did Asset Management management fees increase despite lower MF AAUM?

Yes, Asset Management’s MF management fees increased 24% to Rs 12 crore in Q2FY27 from Rs 10 crore in Q2FY26 despite the Rs 1,402 crore decline in MF AAUM. Its reported equity MF yield increased to 0.44% from 0.29%, a 50% rise.

The fee and asset measures moved in opposite directions in Q2FY27: management fees rose by Rs 2 crore while MF AAUM decreased by Rs 1,402 crore. The presentation reports the higher equity MF yield alongside the fee increase but does not provide a further breakdown of the reason for the yield movement.

Asset Management’s distribution capacity also increased on the disclosed measures. Active partners rose 9% to 6,239 in Q2FY27 from 5,712 in Q2FY26, while employee count increased by eight to 219 from 211.

Is Asset Management profitable while it expands its AIF platform?

No, Asset Management reported an operating loss before tax of Rs 17 crore in Q2FY27, unchanged from Q2FY26, and an operating loss after tax of Rs 10 crore in both quarters. Quarterly revenue nevertheless rose 41% to Rs 16 crore from Rs 12 crore.

For H1FY27, Asset Management reported revenue of Rs 37 crore, versus Rs 27 crore in H1FY26, while operating loss before tax was Rs 24 crore and operating loss after tax was Rs 14 crore. The first-half figures cover a partial year and therefore are not like-for-like with FY26 revenue of Rs 56 crore and operating loss before tax of Rs 49 crore.

Over FY24 to FY26, revenue rose from Rs 29 crore to Rs 43 crore and then Rs 56 crore, which the presentation describes as a 38% compound annual growth rate. Operating loss before tax moved from Rs 29 crore in FY24 to Rs 43 crore in FY25 and Rs 49 crore in FY26; the FY26 figure was adjusted for a Rs 2 crore pre-tax and non-controlling-interest impact from new labour codes.

The Q2FY27 data therefore show growth in AIF assets including commitments alongside a smaller MF asset base and an unchanged quarterly operating loss. Asset Management revenue of Rs 16 crore in Q2FY27 was also lower than the Rs 353 crore reported by the wealth-management segment, which has a different service mix.

Conclusion

Asset Management’s reported buildout was led by alternatives in Q2FY27, with AIF assets rising from Rs 331 crore to Rs 1,063 crore as equity AIF assets reached Rs 700 crore and debt AIF assets reached Rs 363 crore. In contrast, MF AAUM declined across equity, debt and liquid categories, while folios fell by 0.8 lakh even as MF management fees rose to Rs 12 crore.

The next disclosed milestone is management’s expectation of a first close for its second performing credit fund before the financial year ends. The reported measures to watch are whether the Rs 13,500 crore MF AAUM, 8.5 lakh folios and Rs 87 crore monthly SIP book stabilise, and whether revenue growth changes the Rs 17 crore quarterly operating loss before tax.