Alternative Investment Fund

What is an Alternative Investment Fund?

Alternative Investment Fund or AIF is a privately pooled investment vehicle that invests in alternative asset classes such as private equity, venture capital, hedge funds, real estate, commodities, and derivatives. Generally, HNIs (High net worth individuals) and institutions invest in the AIFs as the investment amount is substantially higher.

AIFs are regulated by the SEBI (Securities and Exchange Board of India). As per the SEBI (Alternative Investment Funds) Regulations, 2012, an AIF can be set up as a trust, a company, a limited liability partnership, or a corporate body.

However, many of the AIFs that have been registered with SEBI are in the form of trusts.

Types of AIFs in India

SEBI has categorised Alternative Investment Funds into 3 categories:

Category 1

Venture Capital Fund (VCF)
Angel Funds
Infrastructure Funds
Social Venture Funds

Category 2

Private Equity Funds
Debt Funds
Fund of Funds

Category 3

Private Investment in Public Equity Fund (PIPE)
Hedge Funds

Who Can Invest in an AIF?

Investors willing to diversify their portfolio can invest in AIFs if they meet the following eligibility criteria:

Resident Indians, NRIs, and foreign nationals can invest in these funds.
The minimum investment limit is Rs. 1 crore for investors, whereas the minimum investment amount for directors, employees, and fund managers is Rs. 25 lakh.
AIFs come with a minimum lock-in period of three years.
The number of investors in every scheme is restricted to 1000, except angel funds, where the number of investors goes up to 49.

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Risk Factors – Investments in Mutual Funds are subject to Market Risks. Read all scheme related documents carefully before investing. Mutual Fund Schemes do not assure or guarantee any returns. Past performances of any Mutual Fund Scheme may or may not be sustained in future. There is no guarantee that the investment objective of any suggested scheme shall be achieved. All existing and prospective investors are advised to check and evaluate the Exit loads and other cost structure (TER) applicable at the time of making the investment before finalizing on any investment decision for Mutual Funds schemes. We deal in Regular Plans only for Mutual Fund Schemes and earn a Trailing Commission on client investments. Disclosure For Commission earnings is made to clients at the time of investments. We are not a Registered Investment Advisor and we do not change any fee to our clients.

AMFI Registered Mutual Fund Distributor | ARN – 83313 | Date of initial Registration – 10th Sep 2011 | Current validity – 9th Sep 2026