Protect Your Future With
AIF
Diversification Redifined For Modern Investors.
What Is Alternative Investment Fund?
AIF funds provides an opportunity to expand their investment horizon beyond the world of Mutual Funds. Alternate Investment Fund is a licensed investment vehicle established & incorporated in India for collectively & privately investing on behalf of a niche segment of sophisticated investors. The minimum ticket size of 1 Cr makes these products ultra-exclusive in their investment approach. In the case of a close-ended structure, the scheme also enjoys the flexibility of calling for drawdowns over a period thereby making it favourable in a non-conducive environment. The regulation also permits extension of the tenure up to two years subject to approval and also can opt for early maturity depending on the market scenario. Thus, AIF (Alternate Investment Fund) combines the operational ease of a mutual fund and the flexibility of a PMS making it a perfect blend geared for generating optimum performance for a stipulated investment objective.
KEY FEATURES
Concentrated Portfolio
Specialized Investment Process
Low Volatility
Potential For High Returns
Dynamic Investment Environment
Hedge Funds
Who Can Do AIF Investments?
- Alternative Investment Funds (AIFs) are open to resident Indians, NRIs, and foreign nationals.
- The minimum investment is ₹1 crore, except for directors, employees, and fund managers, who can invest a minimum of ₹25 lakh.
- AIFs typically have a three-year lock-in period, and each scheme is limited to 1,000 investors, with angel funds allowing up to 49 investors.
TYPES OF AIF FUNDS
Category 1 AIF's
- Venture Capital Funds : Invest in early-stage, high-growth potential start-ups. Suitable for High-net-worth individuals (HNIs) who are comfortable with high-risk, high-return investments.
- Angel Funds : Invest in nascent start-ups, often providing early-stage funding that VCFs might not cover. Minimum Investment of Rs. 25 lakh per angel investor. Suitable for Bringing business expertise and mentorship to budding companies.
- Infrastructure Funds : Invest in infrastructure projects such as railway and port construction. Suitable for Those optimistic about infrastructure development.
- Social Venture Funds : Invest in socially responsible businesses, blending philanthropic goals with potential returns.
Category 2 AIF's
- Private Equity Funds:Invest in unlisted private companies, usually with a lock-in period of 4 to 7 years. Helps companies that struggle to raise funds through traditional equity or debt instruments.
- Debt Funds:Invest in debt securities of unlisted companies, often those with high growth potential but lower credit ratings.Cannot be used for lending purposes as per SEBI guidelines.
- Fund of Funds:: Invest in other AIFs rather than having a direct investment portfolio. Diversifies investments across various AIFs.
Category 3 AIF's
- Private Investment in Public Equity (PIPE) Funds:Invest in publicly traded companies’ shares at discounted prices, typically less paperwork than secondary issues.
- Hedge Funds:Invest in both domestic and international markets using aggressive strategies to generate high returns.Can charge management fees of 2% and performance fees of 20% of returns.
Benefits Of AIF Funds
Frequently Asked Questions
AIFs typically have a minimum lock-in period of three years, which means investors must commit their funds for at least this duration.
AIFs often have higher minimum investment amounts and offer access to specialized or private investment opportunities that mutual funds do not. They may also have different regulatory requirements and risk profiles.
AIFs involve higher risk compared to traditional investment options due to their exposure to niche markets and assets. They may also have less liquidity and longer investment horizons.
AIFs are regulated by the Securities and Exchange Board of India (SEBI), which sets guidelines and standards to ensure transparency and protect investors.