PRIM Explained: What Exactly Is the New Portfolio Managers Route for Investing in Mutual Funds?

SEBI has approved and notified a new route called the Portfolio Managers Route for Investing in Mutual Fund Units, or PRIM. The framework provides a dedicated route for portfolio managers to construct and manage client portfolios using direct plans of mutual funds, including ETFs, index funds and Specialised Investment Funds (SIFs). The minimum ticket size under PRIM is ₹25 lakh.

PRIM is important because it sits between conventional mutual-fund investing and traditional Portfolio Management Services (PMS). Instead of an investor selecting individual mutual funds or SIFs and managing allocation and rebalancing independently, a portfolio manager can construct and manage the portfolio on the investor's behalf.

The SEBI Board approved the framework on 24 September 2026, and SEBI notified the new Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026 on 12 October 2026. The new regulations are specified to take effect from 1 April 2027.

So, what exactly is PRIM, how does it work, and how is it different from a normal mutual fund, SIF or PMS?

What Does PRIM Stand For?

PRIM stands for Portfolio Managers Route for Investing in Mutual Fund Units.

It is a regulatory route under the SEBI Portfolio Managers framework that allows portfolio managers to manage client money by investing in eligible mutual-fund products.

Under the framework, these can include:

• Direct mutual fund plans
• Exchange-traded funds (ETFs)
• Index funds
• Specialised Investment Funds (SIFs)

The important point is that PRIM is not a new mutual fund or a new SIF category.

It is a portfolio-management route through which a registered portfolio manager can construct a portfolio using these underlying investment products.

PRIM in Simple Words

Think about three different investors.

One investor chooses a mutual fund himself and invests directly.

Another investor chooses an SIF strategy himself and decides how much to allocate.

A third investor says:

“I don't want to decide which funds to own, how much to allocate to each one, or when to rebalance. I want a professional portfolio manager to make those decisions for me.”

That third model is essentially where PRIM fits.

The investor gives the portfolio manager a mandate, and the portfolio manager decides how to construct and manage the portfolio using eligible mutual-fund products, ETFs, index funds and SIFs.

What Can a PRIM Portfolio Invest In?

PRIM expands the investment universe available to portfolio managers beyond the traditional direct-security approach.

The framework permits investment in:

Direct mutual fund plans

Exchange-traded funds (ETFs)

Index funds

Specialised Investment Funds (SIFs)

This means a portfolio manager could theoretically combine different types of strategies rather than building a portfolio entirely through individual stocks or bonds.

Is PRIM the Same as a SIF?

No.

This is probably the most important distinction to understand.

A SIF is an investment product.

PRIM is a portfolio-management route.

When an investor buys an SIF directly, the investor is selecting a particular SIF strategy.

For example, the investor may choose an Equity Long-Short, Hybrid Long-Short or another SIF strategy and invest according to its terms.

With PRIM, the investor is giving a portfolio manager the broader responsibility of deciding which eligible funds or SIFs should form part of the portfolio, how much should be allocated to each, and how the portfolio should be managed over time.

PRIM vs SIF

The simplest way to understand the difference is:

SIF: You choose the strategy.

PRIM: A portfolio manager chooses and manages the combination of strategies for you.

A direct SIF investment therefore represents exposure to a specific investment strategy, while a PRIM mandate can potentially combine multiple eligible mutual-fund and SIF strategies within a professionally managed portfolio.

What Is the Minimum Investment Under PRIM?

The minimum ticket size under PRIM is ₹25 lakh.

This makes the route accessible at a lower threshold than the traditional PMS minimum of ₹50 lakh that has applied under the earlier framework.

However, the ₹25 lakh figure is the minimum PRIM portfolio size, not the minimum amount required for every underlying investment.

This distinction matters.

The portfolio manager can decide how the ₹25 lakh or more is allocated across eligible products, subject to the applicable regulatory framework and the individual portfolio mandate.

Why Did SEBI Introduce PRIM?

PRIM could address a practical gap for investors who want professionally managed allocation across eligible mutual-fund products without selecting and rebalancing those investments themselves.

Many investors may have enough capital to want professional asset allocation but may not want to invest ₹50 lakh through traditional PMS.

At the same time, choosing multiple mutual funds or SIFs independently can require decisions around:

• Fund selection
• Asset allocation
• Portfolio construction
• Rebalancing
• Risk management
• Monitoring overlapping exposures

PRIM gives a portfolio manager responsibility for these portfolio-level decisions while allowing the portfolio to be constructed using eligible mutual-fund products.

Can PRIM Include SIFs?

Yes.

This is one of the most significant implications for the SIF ecosystem.

SEBI's PRIM framework specifically allows portfolio managers to invest client money in Specialised Investment Funds, along with direct mutual funds, ETFs and index funds.

This potentially creates another distribution and portfolio-construction route for SIFs.

Instead of an investor selecting one SIF directly, a portfolio manager could potentially decide that an SIF should form part of a broader professionally managed portfolio.

That distinction could become increasingly important as the number of SIF strategies expands.

What Does a PRIM Manager Actually Do?

The value proposition of PRIM is not simply access to mutual funds.

The portfolio manager is responsible for portfolio construction and ongoing management.

That can include deciding:

• Which funds should be included
• How much should be allocated to each
• How exposures should be balanced
• When allocations should change
• When the portfolio should be rebalanced
• How risk should be managed across the portfolio

This creates an additional decision-making layer between the investor and the underlying fund products.

Does PRIM Mean Investors Don't Select Funds Anymore?

Not exactly.

The investor still chooses whether to use a PRIM service and selects the portfolio manager or investment approach.

But after that, the portfolio manager takes responsibility for the investment decisions within the PRIM mandate.

That is fundamentally different from buying several mutual funds independently and deciding when to increase or reduce each allocation yourself.

What Are the Fees Under PRIM?

SEBI's framework provides that the fixed management fee can be capped at a maximum of 1% of the client's AUM.

The framework also permits a performance-based fee model.

This is an important difference from ordinary direct mutual-fund investing, where an investor generally bears the scheme's own expenses rather than paying a separate portfolio-management fee for a customised fund portfolio.

What Regulatory Guardrails Apply?

SEBI has introduced several safeguards around the new route.

For entities intending to operate strictly through PRIM, the framework provides for:

Minimum ticket size: ₹25 lakh

Minimum net worth: ₹2 crore

The framework also provides for a 25% prudential cap on investments in schemes of affiliated, group or associate AMCs, designed to address concentration and conflict-of-interest concerns.

The framework also provides a waiver of exit-load provisions for the PRIM route.

Is PRIM Available Right Now?

There is an important timing point.

SEBI's Board approved the PRIM framework on 24 September 2026.

SEBI subsequently notified the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2026 on 12 October 2026, and the regulations specify an effective date of 1 April 2027.

Who Could PRIM Be Relevant For?

PRIM could be relevant for investors who:

• Have at least ₹25 lakh available for a professionally managed portfolio.
• Want portfolio-level asset allocation rather than selecting funds individually.
• Want exposure to mutual funds, ETFs, index funds or SIFs through a managed approach.
• Prefer professional monitoring and rebalancing.
• Do not want to manage multiple fund allocations themselves.

However, the existence of professional management does not guarantee superior returns.

The key question remains whether the portfolio manager can generate enough value through asset allocation, fund selection and risk management to justify the additional costs.

Why PRIM Matters for the SIF Market

For SIFs, PRIM could become an important additional route to reach affluent investors.

SIFs already provide more specialised investment strategies than conventional mutual funds, with a minimum investment threshold of ₹10 lakh under the applicable framework. PRIM potentially adds another layer in which a portfolio manager can combine SIF strategies with other eligible mutual-fund products.

This could change the way some investors access SIFs.

Instead of asking only:

“Which SIF should I buy?”

the question may increasingly become:

“Should an SIF be part of my professionally managed portfolio?”

That is the fundamental shift PRIM introduces.

PRIM, SIF and PMS at a Glance

The simplest way to remember the three is:

Mutual Fund: Invest in a pooled scheme.

SIF: Invest in a specialised investment strategy.

PMS: Give a portfolio manager a mandate to manage a customised portfolio.

PRIM: Give a portfolio manager a mandate to build and manage a portfolio using eligible mutual funds, ETFs, index funds and SIFs.

Final Takeaway

PRIM, or the Portfolio Managers Route for Investing in Mutual Fund Units, is not another mutual fund category.

It is a portfolio-management framework that allows portfolio managers to construct client portfolios using direct mutual fund plans, ETFs, index funds and SIFs.

With a ₹25 lakh minimum ticket, PRIM creates a new middle ground between direct fund investing and traditional PMS. The portfolio manager can take responsibility for fund selection, allocation, portfolio construction and rebalancing rather than leaving those decisions entirely to the investor.

This article is for informational purposes only and does not constitute investment advice or a recommendation to use PRIM, PMS, SIFs or any specific investment product.