Alternative Investment Funding

Key Features

– Investment Focus Non-traditional assets and strategies.  

– High Minimum Investment: Designed for sophisticated or institutional investors.  

– Limited Liquidity: Often structured with longer lock-in periods.  

– Regulatory Oversight: Subject to regulations to ensure transparency and investor protection. 

An Alternative Investment Fund (AIF) is a type of investment vehicle that pools money from investors and invests it in assets other than traditional investments like stocks, bonds, or cash. AIFs typically include private equity, venture capital, hedge funds, real estate, commodities, derivatives, and other structured products. They are governed by specific regulations in different jurisdictions, such as SEBI (Securities and Exchange Board of India) regulations in India.  

Types of Alternative Investment Funds

  1. Category I AIFs 

   – Invest in socially or economically beneficial projects like infrastructure, start-ups, and SMEs.  

   Examples: Venture capital funds, infrastructure funds, social venture funds.  

  1. Category II AIFs

   – Includes private equity funds or debt funds that do not leverage funds or undertake borrowing.  

   Examples: Private equity funds, debt funds.  

  1. Category III AIFs 

   – Employ complex trading strategies like leverage, derivatives, and short-selling to achieve high returns.  

   Examples: Hedge funds.