Invest in Alternative Investment Funds with Nivesh
Alternative Investment Funds are defined as privately pooled investment funds. They are categorized by SEBI as Category I AIF, Category II AIF, and Category III AIF. Assets under management can include start-ups, SME funds, infrastructure funds, private equity funds, or even hedge funds that may be trading in listed or unlisted derivatives depending on the type of fund.
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Features and Benefits of Alternative Investment Funds
As the name suggests Alternative Investment Funds in India are non-traditional investments. This means the assets under such funds are not correlated to the stock market. These funds are primarily for high-net-worth investors looking for diversification and better potential returns while absorbing the accompanying risk.
Some of the benefits and features of Alternative Investment Funds are:
Diversification
Diversification is one of the key features of these funds. They have considerable freedom to decide where to invest unlike most funds which are regulated by SEBI.
Non-traditional Investment Options
Non-traditional investment options are available to these funds which are not generally open to all investors.
Potential Returns
Potential returns are a factor considering the type of non-traditional assets these funds invest in.
Minimum Investment Amount
The minimum investment amount is INR 1 Crore depending on the type of AIF.
Types of Alternative Investment Funds
Alternative Investment Funds in India are categorized into 3 types are per SEBI rules
Category I
Category I are funds with strategies to invest in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable. These invest in Startups, SME's, Social ventures, Infrastructure funds, Angel funds, or Venture Capital Funds
Venture Capital Fund
SME Funds
Social Venture Funds
Infrastructure Funds
Category II
Category II are funds which cannot be categorized as Category I AIFs or Category III AIFs. These funds do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the Regulations. Private Equity debt funds that invest in real estate funds, funds for distressed assets, funds of funds, etc.
Real Estate Funds
Private Equity Funds
Funds for Distressed Assets
Category III
Category III are type of fund that invests in Hedge funds or funds which trade with the purpose of making short-term returns and can employ complex and diverse trading strategies, like using arbitrage, derivatives trading, and open-ended funds.
Hedge Funds
Private Investments in Public Equity
Aspects of Alternative Investment Funds
Alternative Investment Funds raise money to form an investment fund pool that invests in non-traditional assets classes. These are asset classes that investors may not have direct access through regular methods like Mutual Funds or Debt. Money can be raised from any investor of Indian, foreign, or non-resident origin for such funds.
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