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What is Alternative Investment Funds (AIF)?

An Alternative Investment Fund or AIF is a confidential pooled investment vehicle developed or registered in India that pools assets from professional investors, whether Indian or global, for investment in accordance with a defined investment policy for the benefit of its investors.

 

AIFs may be incorporated or incorporated as a corporation, trust or other legal entity (including limited partnerships). The SEBI (Mutual Funds) Rules, 1996, the SEBI (Collective Investment Schemes) Rules, 1999 or any other regulations of the Board relating to the management of a fund do not apply to AIFs.

Types of Alternative Investment Fund (AIF)

Venture Capital Fund (VCF)

Venture capital funds invest in high-growth start-ups that are cash-strapped in the early stages of their business and need capital to develop or expand their operations.

Infrastructure Fund (IF)

Infrastructure funding is an investment scheme that primarily invests in facilities and equipment that provide essential services to communities.

Angel Fund

Angle Funds are funds where money is raised by investors called 'Angels'. This combined amount is then invested in startups in large amounts,

Social Venture Fund

Social venture capital is a form of investment financing that is usually funded by a group of social venture capitalists.

Private Equity (PE) Fund

Private equity is an alternative form of private financing that consists of funds and investors that invest directly in private companies

frequently asked questions

Any fund established or registered in India which is a private pooled investment vehicle that raises funds from sophisticated investors, whether Indian or foreign, for the purpose of investing in accordance with a stated investment policy for the benefit of its investors is called an Alternative Investment Fund (AIF ).

Investors who want to diversify can choose alternative investment funds to invest in. All Indians including NRIs, PIOs and OCIs are eligible to invest in AIFs. However, they must meet the eligibility requirements, which include a minimum capital of Rs 20 crore for each scheme and Rs 10 crore for Angel Funds. Each investor has to make a minimum investment of Rs1 crore or Rs25 lakh (in case of AIF employees, directors and fund managers).

Angel funds require a minimum investment of INR 25 million per investor. If the AIF is not an angel fund, the minimum investment amount per investor is INR 1 billion.

An alternative investment is a financial asset that does not fall into one of the conventional (stocks, bonds, and cash) investment categories.

A mutual fund is a pooled investment entity, with many participants pooling money. Mutual investments include stocks, bonds and financial market instruments, while Alternative Investment Funds (AIFs) differ from traditional standard investments such as stocks, bonds, etc. Investing in various assets.

They are also faster than traditional assets such as stocks, bonds and mutual funds. Most of them are relatively illiquid and therefore difficult to sell quickly. Most are complex and often involve greater risks than typical investments.

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