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  • What is Alternative Investment Funds?

    • It is Anything alternate to traditional form of investments
    • (AIFs) are defined in Regulation 2(1)(b) of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
    •  refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company which are not presently covered by any Regulation of SEBI nor coming under the direct regulation of any other sectoral regulators in India-IRDA,PFRDA, RBI
  • AIFs are categorized into the following three categories:

    • Category I
      • AIF are those AIFs with positive spillover effects on the economy. Example: Venture Capital Funds, SME Funds etc.
      • Category II –
        • AIF are those AIFs for which no specific incentives or concessions are given. E.g. Private Equity or debt fund.
      • Category III
        • AIF are funds that are considered to have some potential negative externalities in certain situations and which undertake leverage to a great extent; with a view to make short term returns. No specific incentives or concessions from the government or any other Regulator. E.g. Hedge.