Unleashing Untapped Potential with Alternative Investment Funds
An AIF or an Alternate Investment Fund means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors. The minimum ticket size for investing in any Alternative Investment Fund or an AIF in India is ₹1 crore.
In AIFs, one does not need to open a demat account this is a pooled vehicle; hence all clients investing at the same closure have similar returns experience. The tax implications are different for the different categories of AIF.
By investing into Alternative Investment Funds (AIFs), investors seek diversified investment opportunities beyond traditional avenues. With the Indian market witnessing a surge in demand for innovative investment options, AIFs have emerged as a prominent choice for savvy investors.
At their core, AIFs are investment vehicles that pool funds from investors with a common investment objective. These funds, managed by skilled professionals, provide access to unique asset classes such as private equity, venture capital, hedge funds, and real estate. By diversifying their portfolio, investors can potentially enhance their returns and mitigate risks.
India’s regulatory framework, spearheaded by the Securities and Exchange Board of India (SEBI), has laid a solid foundation for the growth of AIFs. SEBI’s guidelines ensure transparency, investor protection, and accountability, making AIFs an attractive avenue for both domestic and foreign investors.
Types & Categories of Alternative Investment Funds (AIFs)
1. Category I AIF
Alternative Investment Funds (AIFs) which invest in the unlisted & private space of start-up or early-stage of ventures and popularly known as venture capital equity or debt funds.
2. Category II AIF
Alternative Investment Funds (AIFs) which invest in the unlisted or private space of mid stage or late stage of a business either in form of debt or equity. These funds, when investing in the mid-stage of a business are also called private equity funds or PE funds. The same CAT II funds, when investing in late stage businesses are called Pre-IPO funds.
3. Category III AIF
Alternative Investment Funds (AIFs) which invest primarily in the listed space of equities across large, mid, small cap businesses and are allowed to employ diverse or complex trading strategies and may employ leverage through investment in listed or unlisted derivatives. This is one of the most popular and largest categories from the sellers and buyers’ perspectives as this category has maximum number of funds, as well as maximum number of investors.
Knowledge Base
An AIF or an Alternate Investment Fund means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
These are specifically made for high-net-worth (HNI) or UHNIs investors with customized investment needs.
AIFs provide investors with an opportunity to diversify their portfolio beyond traditional asset classes like stocks and bonds. They can potentially yield higher returns, although they may also carry higher risks.
Our team of experts at GoForSIP Financial Services guides you through the AIF landscape, conducting thorough due diligence, analyzing market trends, and employing advanced risk management strategies to build a tailored AIF portfolio for you.
AIFs are usually more suitable for sophisticated investors who have a higher risk tolerance and are looking to diversify their portfolios. It’s crucial to understand the risks involved before investing in AIFs.
Invest beyond the conventional with GoForSIP Financial Services. Experience the power of alternative investments and diversify your wealth growth prospects.
