Exclusive investment with Alternate Investment Funds

What are Alternative Investment Funds (AIFs)?

AIFs are a sophisticated class of pooled investment vehicles offering alternatives to traditional investments like direct equity, mutual funds, and bonds. They are designed for high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) seeking exclusive investment opportunities.

What is the minimum amount required to invest in AIF?

The minimum ticket size of investment in an AIF fund is INR 1 Crore.

How are AIFs regulated?

AIFs are regulated by the Securities and Exchange Board of India (SEBI) under the Alternative Investment Funds Regulations of 2012.

Who can invest in AIFs?

AIFs are typically aimed at institutional and high-net-worth investors, with a minimum investment ticket size of Rs. 1 crore.

What types of investments do AIFs focus on?

AIFs target alternative asset classes such as venture capital, private equity, hedge funds, infrastructure funds, and more.

What are the different categories of AIFs?

AIFs are classified into three main categories:

Category I: Investments in start-ups, early-stage ventures, SMEs, and sectors deemed beneficial to the economy.

Category II: Includes debt funds and private equity funds, focusing on defensive investment options.

Category III: Engages in sophisticated trading strategies like arbitrage, margin trading, and derivatives.

Does investment in AIF require a Demat Account?

No. You can start investing in AIF without a DEMAT Account.

What is Category I AIF?

Category I AIFs primarily invest in start-ups, early-stage ventures, SMEs, and sectors that are socially or economically beneficial. They often receive government incentives or concessions.

What is Category II AIF?

Category II AIFs include debt funds and private equity funds. These funds offer diversified portfolios managed by experienced fund managers, focusing on reducing investors' risk profiles.

What is Category III AIF?

Category III AIFs engage in sophisticated trading strategies like arbitrage, margin trading, futures, and derivatives. Examples include hedge funds and Private Investment in Public Equity (PIPE) funds.

 What types of AIFs are available?

Equity & Private Equity AIFs: Invest in listed and unlisted equity shares of companies across various growth stages.

Multi Factor AIF: Invest in top 20-30 stocks selected through Factor Analysis.

Distressed Asset AIFs: Provide high-return fixed income opportunities through debt financing for distressed companies.

Real Estate AIFs: Access early-stage real estate investment opportunities with renowned builders.

How can AIFs contribute to my investment portfolio?

AIFs offer diversified investment opportunities and potential for higher returns through well-defined strategies, making them a valuable addition to any high-net-worth investment portfolio.

 What are the fees and profit sharing structure in AIF?

There is no defined structure for fee and profit sharing in AIF as each fund is managed separately and by a different team of experts. To know more on this, you can send your query to amc@motilaloswal.com

Who is a ‘Sponsor’ in AIF?

A sponsor is an individual or group who establishes the AIF. This includes the promoter in the case of a company and the designated partner in the case of a limited liability partnership.