AIF

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Alternate Investment Funds (AIF)

Alternative Investment Fund or AIF is a privately pooled investment vehicle that invests in alternative asset classes such as private equity, venture capital, hedge funds, real estate, commodities, and derivatives. Generally, HNIs (High net worth individuals) and institutions invest in the AIFs as the investment amount is substantially higher.

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AIFs Are Categorized Into The Following Three Categories:

  • Category-I: These funds generally invest in start-ups or early stage ventures, social ventures, SMEs, infrastructure or other sectors which are considered socially or economically important for the country.
  • Category-II: These include private equity funds and debt funds. Private equity funds and debt offers investment in diversified portfolios managed by experienced fund managers in line with well-defined investment strategies. Hence they serve as an investment alternative as well as a mechanism to hedge.
  • Category-III: These include hedge funds and undertake leverage to a great extent. Hedge funds are aggressively managed and use several types of strategies such as leveraged, long, short and derivative positions in both domestic and international markets.