Alternative Investment Funds (AIF)

An Alternative Investment Fund is a privately pooled investment vehicle, regulated under the SEBI (Alternative Investment Funds) Regulations, 2012, that collects funds from investors according to a defined investment strategy. Depending on its category and mandate, an AIF can provide exposure to strategies and assets not typically available through equities, mutual funds or direct bonds.

What this includes

• Category I - generally funds in areas viewed as economically or socially desirable, such as venture capital, infrastructure, SME and social-venture funds, subject to applicable regulations
• Category II - private equity, debt and other funds that do not fall under Category I or III and do not employ leverage beyond day-to-day operational requirements, subject to applicable regulations
• Category III - funds that may employ more complex or diverse trading strategies, including leverage, subject to applicable regulations
• Privately pooled structure, governed by a fund’s own placement memorandum and investment mandate

What to weigh up

• SEBI AIF Regulations set a minimum investment threshold - currently ₹1 crore per investor for most categories - subject to applicable regulations, fund terms and investor eligibility; always confirm the current figure and the specific fund’s terms before committing.
• AIFs are typically less liquid than listed securities or mutual funds, and lock-in or redemption terms vary by fund.
• Returns are not guaranteed and depend on the fund’s strategy and category; Category III funds in particular can carry higher risk, including from leverage.
• PLACEHOLDER - the specific AIF schemes available through SNNB Fintech are to be confirmed by the client.