Alternate Investment Funds are funds established in India as a privately pooled investment vehicle to collect funds from sophisticated investors. AIFs invest in listed & unlisted asset classes but are more focused on investing in instruments other than asset classes such as equity & debt. The minimum investment required is 1crores!

Lock-in period:

• For Category I & II- Close-ended funds with 3-5 years tenure
• For Category III- Can be both open-ended or closed-ended.

Taxation:

• Pass-through taxation applies to Cat II AIFs & Cat III AIFs are taxed at the funds end.

Category I AIF: AIFs which invest in

• Venture capital funds (Including Angel Funds)
• SME Funds
• Social Venture Funds
• Infrastructure funds

The government or regulators consider it as socially or economically desirable. It comes with a lock-in of 3-5 years.

Category II AIF:

Category II AIFs include private equity funds, debt funds, funds of funds, real estate funds, etc. Some debt AIFs invest in companies with lower credit ratings & higher yields. A minimum of 20cr corpus is required to operate an AIF within this category.

Category III AIF:

This category of AIF is both open & close-ended. Their objective is to provide short-term returns to unitholders. The type of funds under them are long-only equity funds & Long Short Equity Funds.

• HNIs & UHNWIs aiming for portfolio diversification
• Investors with a minimum investment of ₹1 crore
• Those seeking access to exclusive, off-market opportunities
• Individuals who understand and are comfortable with moderate to high-risk investments

• Curated Funds with top-performing track records
• Thorough Due Diligence & Transparency
• Access to Institutional-Grade Opportunities
• Flexible Tenures & Exit Options
• End-to-End Portfolio Reporting

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