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).
An AIF that invests in enterprises, startups, social enterprises, small and medium enterprises (SMEs), infrastructure or other sectors/areas deemed socially or economically desirable by the government or regulatory authorities is a Category I AIF.
AIFs that do not fall under categories I and III and do not lend or lend other than to meet the day-to-day operational requirements and are permitted by the SEBI (Alternative Investment Funds) Regulations, 2012 are category II AIFs.
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.
AIFs trade in a variety of ways and use leverage, such as investing in listed or unlisted derivatives. Category III AIFs include hedge funds, PIPE funds and other types of funds.
Certain returns cannot be guaranteed under the AIF regulations set forth by SEBI. However, the AIF Manager's investment objective is to outperform the benchmark indicators. At Athworth, each investment strategy has consistently outperformed its own benchmark indicators over the years.
The documents required to open your AIF account are:
Account Opening Form
PAN Card Copy
Relevant KYC Forms prescribed by the regulator
The tax is paid at the fund level and it is after tax that goes back to the customer. AIF's income is taxed at the capital gains tax rate applicable to stocks and market-linked products and at the maximum marginal rate on income from other sources such as interest, dividends and processing fees.
A "fund of funds" is an investment strategy of holding a portfolio of other investment funds instead of investing directly in stocks, bonds or other securities.
AIF management services can only be provided by entities registered with SEBI under the SEBI (Alternative Investment Funds) Regulations, 2012.
The AIF platform enables investment by all Indian citizens whether resident or not. Non-resident Indians (excluding US and Canadian citizens) can invest in AIFs. Unlike PMS, NRIs are not required to open a PIS account. However, accepting funds from both NRE and NRO accounts is dependent on funding structure.
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