Alternate Investment Funds

Alternative Investment Funds (AIFs) are privately pooled vehicles established or incorporated in India, regulated by SEBI, that collect capital from sophisticated investors—both Indian and foreign—for investment in accordance with a pre-defined strategy. AIFs offer access to non-traditional assets such as private equity, venture capital, real estate, and hedge funds. They are primarily meant for high-net-worth individuals and institutional investors, usually requiring a minimum investment of ₹1 crore. AIFs are categorized as follows:

  • Category I: Invest in socially or economically desirable sectors such as start-ups, SMEs, and infrastructure.
  • Category II: Encompass private equity and debt funds that invest primarily in unlisted companies.
  • Category III: Employ complex trading strategies for short-term returns, including hedge.

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