Alternate Investment Funds (AIF)

What are Alternate Investment Funds (AIF)?

An Alternative Investment Fund (AIF) is a privately pooled investment vehicle in India that gathers funds from sophisticated investors, Indian or foreign, for investments based on a defined policy. Regulated by SEBI’s 2012 AIF Regulations, the minimum investment in an AIF is ₹1 crore, and these funds may be structured as corporations, LLPs, trusts, or other entities.

With the Indian market witnessing a surge in demand for innovative investment options, AIFs have emerged as a prominent choice for savvy investors. By investing into Alternative Investment Funds (AIFs), investors seek diversified investment opportunities beyond traditional avenues.

Our Research

What did we do

We spoke to over 20 Fund managers and over 100 clients to understand their needs
Came up with a strategy on how to park the money based on risk and return requirement
Found funds with differentiated strategies

Key Findings

Looked at niche funds with good Downside Capture and better risk and returns
Timing the entry right for investment

Our Filters

Firms that excelled in bull markets and also outperformed during periods of market turmoil, showcasing impressive downside capture ratios.

AIFs combine the operational ease of mutual funds with the flexibility of PMS, creating a perfect blend for achieving optimal performance. To enhance risk-adjusted returns, they employ complex strategies such as unlisted equity investments and long-short hedging.

Types of Alternate Investment Funds (AIFs)

CATEGORY I AIF

Invests in socially or economically beneficial sectors like startups, infrastructure, and SMEs. These funds receive SEBI incentives and tax benefits.

CATEGORY II AIF

Includes private equity funds, debt funds, or funds not categorized under I or III. These focus on medium- to long-term growth without SEBI incentives.

CATEGORY III AIF

Uses complex strategies like derivatives, short-selling, and leverage for short-term returns. Suitable for high-risk, high-return investors.

One of the key advantages of AIFs is their ability to cater to different risk appetites and investment horizons. Whether you’re a high-net-worth individual, institutional investor, or a qualified investor, AIFs offer tailored investment strategies that align with your financial goals.

How is AIF Different from Mutual Funds?

Customization: Personalized portfolios
Target: Sophisticated investors seeking niche investments
Flexibility: Faster decision-making
Innovation: Unique investment strategies
Compliance: Less regulatory requirements
Cash calls in frothy markets: Can book profits and sit on cash

Benefits : Preferential Access

As QIBs, AIFs can invest in preferential share issuances by listed companies, enabling firms to raise capital efficiently while securing discounted shares.
They also participate in negotiated investments to acquire significant equity stakes in public companies through PIPE.
Additionally, AIFs invest in convertible securities, preference shares, and distressed assets, leveraging SEBI's flexible framework to pursue diverse investment strategies.

What is better for you: PMS or AIF?

Portfolio Management Services (PMS)

Corpus of Rs. 50lacs to 2 Cr
Higher Liquidity needs
Shorter investing Time horizon
Greater control over investments
Lower Risk Parameters

Alternate investment fund (AIF)

Corpus of Rs. 1 Cr to 5 Cr or >
Access to PIPE & QIB
Higher Risk Tolerance
Long term Capital appreciation
Access to Unconventional Markets

We are excited to introduce Alternative Investment Funds (AIFs)—a premier investment solution designed to elevate your portfolio.

We have partnered up with leading funds of India to provide you with a curated selection of the best performing funds with exceptional returns.

Let us guide you through these exclusive opportunities to maximize your portfolio’s potential. Contact us today to learn more and start your journey toward financial excellence.

If interested, please fill out the Form and our team will get back to you!