Alternative Investment Fund [AIF] are a class of pooled investment funds which invest in venture capital, real estate, private equity, hedge funds, managed futures. In other words, an AIF refers to an investment which is different from the conventional avenues of investment such as stocks, debt securities, etc.
Alternative Investment Fund [AIF] are not covered under the jurisdiction of any regulatory body in India nor are they classified under the Mutual fund regulations laid down by the SEBI. AIF’s are defined under Regulation 2(1) (b) of the SEBI (Alternative Investment Funds) Regulation, 2012 as “privately held and managed pool of investment fund of either domestic or foreign origin, organised in the form of a body corporate, company, LLP (limited liability partnership), or a trust. An AIF can be established in any of the forms mentioned above.
AIF’s are private pooled investment funds and are not available through the forms of public issues (like Initial Public Offerings) which are applicable to Mutual Funds or other collective investment Schemes.
Generally, high net worth individuals and institutions invest in Alternative Investment Funds as it requires a high investment amount, unlike Mutual Funds
FAQs
1. What is AIF?
- A. Alternative Investment Fund or AIF means any fund which has been set up or generated Integrated in India, which is an investment fund that is privately pooled Collects assets, whether Indian or foreign, from advanced investors for Investing it for the good of it in accordance with a given investment policy Investors. The AIF does not include funds that are insured by SEBI (Mutual Funds) Regulations, 1996, SEBI Regulations (Collective Investment Schemes) 1999, Or any other board rules to control the activities of fund management.
- 2. Different Categories of AIF?
- A. In one of the following categories, applicants may seek registration as an AIF,
As may be appropriate, and in sub-categories thereof: [Ref. Regulation 3(4)]
- AIF category I:
- Venture capital funds (Angel Funds Included)
- Funds for SMEs
- Funds for Social Projects
- Funds for Infrastructure
- AIF Category II
- AIF Category III
Q.3 Minimum Corpus Require for AIF registration?
A. For Category I- Minimum Corpus of INR 20 Crores (INR 10 Crores in case of Angel Funds)
Category II-Minimum Corpus of INR 20 Crores
Category III- Minimum Corpus of INR 20 Crores
Q.4 Registration Fees to be paid to SEBI?
A. Registration fee to be paid by an AIF is as under:
Category I Alternative Investment Funds Rs. 5,00,000
Category II Alternative Investment Funds Rs. 10,00,000 Category
III Alternative Investment Funds Rs. 15,00,000
Angel Funds Rs. 2,00,000
Q5 what is Angel Fund?
- The Angel Fund is a sub-division of the Venture Capital Fund under the Alternative Investment Fund Division I, which raises funds from institutional investors and from angel investors.
Invest in compliance with the rules of the AIF Regulations, Chapter III-A.
In the case of an angel fund, the only way to collect funds is by distributing units to the angel fund.
Investors Angel. Angel investor “means any person who proposes to invest in an angel investor”
An angel fund that meets one of the criteria set out below, namely,
(a) an individual investor who has at least two crores of net tangible assets
Rupees which exclude the value of their principal place of residence and who:
I have experience in the early stage of investment, or I have early-stage investment experience
(ii) has to experience as a serial entrepreneur or as a serial entrepreneur,
(iii) is a senior management specialist with a minimum of ten years of experience.
Expertise;
(‘Investment experience in the early stages’ means previous investment experience
“In a start-up or new or early-stage projects and” serial entrepreneur
That means a person who has promoted or co-promoted more than one start-up ventures.
(a) a corporate entity with a net value of at least 10 crore rupees; or
(b) an individual with a net value of at least 10 crore rupees;
(c) an AIF registered in compliance with these regulations or a VCF registered in compliance with those regulations.
Regulations concerning SEBI (Venture Capital Funds), 1996.
Angel funds shall consider an investment, up to a maximum term of 3 years,
Not less than ’25 lakh from the investor’s angel.
