An Alternative Investment Fund is a privately pooled investment vehicle that collects funds from eligible investors and invests them according to a defined strategy. AIFs are regulated by the Securities and Exchange Board of India (SEBI) and are generally meant for sophisticated investors who understand higher risk and longer investment horizons.

AIFs are not publicly traded like mutual funds and usually require a higher minimum investment amount.

Alternative Investment Fund

Key Features of AIFs

  • Professionally Managed Structure: AIFs are managed by designated investment managers who execute the strategy defined in the fund documents.
  • Minimum Investment Requirement: AIFs generally require a minimum investment of ₹1 crore (lower threshold applicable for certain investors such as employees or directors of the fund).
  • Limited Number of Investors: Each AIF scheme can have a maximum of 1,000 investors (200 in the case of Angel Funds).
  • Defined Tenure: Most AIFs have a fixed tenure, typically ranging from 3 to 10 years, depending on the investment strategy.
  • Regulated Framework: AIFs operate under SEBI regulations, with disclosure norms, compliance standards, and reporting requirements.
  • Risk Profile: Investments in AIFs may involve higher risk compared to traditional products and are generally suited for investors with a higher risk appetite and long-term outlook.

Alternative Investment Funds provide access to unique asset classes and structured opportunities that are not available through conventional investment products. Understanding the structure, categories, and risks involved is important before participating.

To explore how Alternative Investment Funds can be added to your portfolio, connect with FutureKonnect for more information and transaction support.

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