What Are Alternative Investment Funds (AIFs)?

Alternative investment funds (AIFs) are investment vehicles that pool funds from sophisticated investors to invest in a broader range of assets compared to traditional options. These can include private equity, venture capital, real estate, infrastructure, commodities, private credit, angel funds, and more.

Explore Further

Request a Callback

Why Choose AIFs?

Discover the unparalleled benefits of introducing Alternative Investment Funds into your wealth portfolio.

Well Regulated

The Securities and Exchange Board of India (SEBI) enforces strict guidelines for Alternative Investment funds under regulation 2012, fostering transparency and a standard, investor-friendly environment.

Diversification

AIFs offer portfolio diversification beyond traditional assets by providing access to private credit, real estate, angel funds, global markets, reducing risk and enhancing long-term wealth creation.

Expert Management

AIFs leverage the expertise of qualified industry experts who meticulously research, select, and continuously monitor promising investment opportunities.

Wealth Creation

AIFs unlock exceptional growth potential by helping HNI/UHNI investors access exclusive private market products, generating superior risk-adjusted returns with minimal volatility.

Types of Alternative
Investment Funds (AIFs)

Category I

Criteria

  • Infra, Social, Non-banked Credit for SME
  • Special incentives provided by the government
  • Invest in start ups or early stage ventures
  • Socially or economically desirable areas

Typical Strategies

Venture Capital FundsSME FundsSocial Venture FundsInfrastructure Funds

Cons

  • Close ended
  • Not allowed to leverage

Taxation

Pass through, except for business income

Risk

Very High
Category II

Criteria

  • Real Estate, Private Equity, Debt Fund, distressed assets
  • No special incentives from government
  • Do not fall under category I & III

Typical Strategies

Private Equity FundsReal Estate FundsDebt FundsFunds of Funds

Cons

  • Close ended
  • Not allowed to leverage

Taxation

Pass through, except for business income

Risk

High
Category III

Criteria

  • Complex trading strategies
  • Leverage permitted
  • May invest in Category I & II AIFs
  • Invest in listed and unlisted derivatives

Typical Strategies

Hedge FundsPIPE Funds

Cons

  • Open or close ended
  • Allowed to leverage

Taxation

Taxable at fund level, subject to highest marginal rate of tax

Risk

Very High