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What is alternative investment fund and types of category?




Alternative Investment Fund or AIF implies any fund established or consolidated in India which is a secretly pooled investment vehicle which collects funds from complex financial investors, whether Indian or unfamiliar, for investing it in accordance with a defined investment policy for the benefit of its investors. 

AIF does exclude reserves covered under the SEBI (Mutual Funds) Guidelines, 1996, SEBI (Collective Investment Schemes) Guidelines, 1999 or on the other hand some other guidelines of the Board to regulate fund management activities. Further, certain exclusions from enrollment are given under the AIF Guidelines to family confides in set up to help 'family members' as characterized under Companies Act, 1956, representative government assistance trusts or tip confides in set up to help representatives, 'holding companies' inside the importance of Section 4 of the Companies Act, 1956 etc.

Applicants can look for enrollment as an AIF in one of the following categories, furthermore, in sub-categories thereof, as might be relevant:


  1. Category I Alternative Investment Fund:

  • Venture capital funds (Including Angel Funds)
  •  SME Funds
  • Social Venture Funds
  • Infrastructure funds

  1.  Category II Alternative Investment Fund
  2.  Category III  Alternative Investment Fund

What are Category I AIFs

AIFs which put resources into fire up or beginning  stage ventures or social ventures or SMEs or infrastructure or different areas or regions which the government or controllers consider as socially or economically desirable and will include venture capital funds, SME Assets, social venture funds, framework reserves also, such other Alternative Investment Funds as might be determined.


What are Category II AIFs

 AIFs which don't fall in Category I and III and which don't undertake leverage or borrowing other than to meet day-to-day operational requirements what's more, as allowed in the SEBI (Alternative Investment Funds) Guidelines, 2012.

Different kinds of funds, for example, real estate funds, private equity funds (PE funds), funds for troubled resources, and so on are enrolled as Category II AIFs.


What are Category III AIFs

AIFs which utilize assorted or complex exchanging procedures and may utilize influence remembering through investment in listed or unlisted derivatives. 

Different kinds of funds, for example, hedge funds, PIPE Funds, etc. are enlisted as Category III AIFs.

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