For eligible investors
Alternative Investment Funds, in plain terms.
Privately pooled investment vehicles that can invest beyond traditional listed markets, for sophisticated investors who understand the risks and longer commitments involved.
AIFs are available only to investors who meet the minimum investment and eligibility requirements prescribed by SEBI (generally ₹1 crore, with specific exceptions). Please confirm the current regulatory requirements before investing.
01
What it is
Alternative Investment Funds (AIFs) are privately pooled investment vehicles registered with SEBI that collect funds from sophisticated investors.
AIFs can invest in areas not typically accessible through mutual funds, such as private companies, venture capital, private credit, real estate or long-short strategies.
They are often closed-ended, with capital committed for several years, and may draw down your commitment in stages as investments are made.
- Category I
- Funds investing in start-ups, early-stage ventures, SMEs, infrastructure and similar areas considered economically desirable.
- Category II
- Funds such as private equity and debt funds that do not fall into Category I or III, with limited leverage.
- Category III
- Funds that may employ complex or trading strategies, including leverage, such as hedge funds.
02
Who it may be suitable for
- Investors who meet SEBI's eligibility and minimum investment requirements
- Those with a substantial existing portfolio seeking diversification
- Investors comfortable with illiquidity and multi-year lock-ins
- Those who understand that outcomes can vary widely
Suitability depends on your individual circumstances. This list is general, not a recommendation.
03
How it works
- 01
Assess suitability
Understand whether an alternative allocation fits within your wider portfolio.
- 02
Review the offering
Study the strategy, terms, fees, lock-in and risks in the private placement memorandum.
- 03
Commit capital
Sign the contribution agreement; capital may be drawn down over time.
- 04
Monitor
Receive periodic reports from the fund manager, with our support for review conversations.
04
What we help with
- Explaining AIF categories, structures and terms
- Understanding fees, lock-ins and drawdown schedules
- Documentation and onboarding with the fund manager
- Keeping track of commitments and reporting
05
Key considerations
- AIFs carry high risk, including possible loss of capital.
- They are often illiquid. You may not be able to exit before the fund's term ends.
- Valuations may be infrequent and harder to verify than listed securities.
- Fee structures can be complex, often with management and performance-linked fees.
- Eligibility and suitability requirements apply. Returns are not guaranteed.
06
Frequently asked questions
What is an AIF?
An Alternative Investment Fund is a SEBI-registered, privately pooled investment vehicle that invests on behalf of its investors under a defined strategy, often in areas such as private equity, venture capital, private credit or complex trading strategies.
Who can invest in AIFs?
AIFs are intended for sophisticated investors who meet the minimum investment set by SEBI (generally ₹1 crore, with certain exceptions such as accredited investors) and for whom the risks and illiquidity are suitable.
How is an AIF different from a mutual fund?
Mutual funds are open to all investors, are highly regulated for diversification and liquidity, and most can be redeemed on any business day. AIFs have high minimums, can follow more flexible or concentrated strategies, are often closed-ended with multi-year lock-ins, and have different fee and tax structures.
Can I exit an AIF early?
Often not. Many AIFs are closed-ended, with capital committed for the life of the fund. Early exit options, if any, depend on the specific fund's terms.
Talk to us about AIF.
A relaxed, no-obligation discussion about where you are and where you’d like to be. Bring your questions. We’ll bring clarity.