What is Alternative Investment Fund (AIF)? Beginner’s Guide for HNIs

High-net-worth investors in India are increasingly exploring Alternative Investment Funds (AIFs). These are SEBI-regulated vehicles designed to provide access to asset classes beyond traditional equities and mutual funds.

What is an AIF?

• AIF = Privately pooled investment vehicle regulated under SEBI AIF Regulations, 2012.
• Minimum investment: ₹1 crore.
• Investors: HNIs, NRIs, Family Offices, Institutions.

Why Consider AIFs?

• Diversification: Access to private equity, venture capital, real estate, hedge strategies.
• Professional Management: Expert managers with sector focus.
• Risks: Long lock-ins, Higher risk.

SEBI Categories of AIFs

1. Category I → Venture capital, SME, social ventures.
2. Category II → Private equity, debt, distressed assets.
3. Category III → Hedge-style funds, leverage allowed.

Disclaimer
This blog is for educational purposes only and does not constitute investment advice. Past performance may or may not be sustained in the future. Investments in AIFs and PMS are subject to market risks. Please consult your SEBI-registered investment advisor before investing.