The AIF industry has demonstrated robust annual growth of 30% during FY22-23, according to Sebi data. Category II AIFs, which include debt funds, have emerged as the largest share of overall AUM, standing at INR6.94 lakh crore in March 2023. This growth can be attributed to the increased demand for AIFs as a means of mitigating credit risk, especially after the Franklin Templeton fiasco in 2020. To cater to this demand, Santosh Kamath, the fund manager who previously headed the fixed income division of Franklin Templeton, has been moved to India alternatives business. He plans to launch credit risk funds targeted towards sophisticated investors. However, it is important to note that while AIFs offer potential benefits, they also come with their own set of risks. Therefore, it is crucial to have a proper risk-management framework in place. Read more [here](https://economictimes.indiatimes.com/prime/money-and-markets/lesson-from-franklin-templeton-fiasco-investors-lap-up-aifs-to-mitigate-credit-risk/primearticleshow/103636400.cms).