Sebi for easing AIF rules, lowering minimum investment limit for LVFs

The Securities and Exchange Board of India (Sebi) has proposed several changes to the alternate investment fund (AIF) regulations, including lowering the minimum investment threshold for large value funds and a separate type of AIF scheme that would admit only accredited investors.

The regulator has suggested relaxations to large value funds (LVFs) such as reduction of the minimum investment amount from ₹70 crore to ₹25 crore, removal of restriction on maximum number of investors in LVFs and exemption from the mandatory requirement of annual audit of the terms of PPM (private placement memorandum).

It also proposed to provide the option to existing AIF schemes to avail the benefits available to the LVFs and convert themselves to LVF schemes with appropriate investor consent.


LVFs are alternative investment funds or schemes of an AIF in which each investor is an accredited investor and invests not less than ₹70 crore.

The regulator said accredited investors are considered sophisticated enough to understand the risks associated with investment products and also have the ability to negotiate the necessary risk mitigation norms with the investment provider in their client agreements.

It has been observed that traction in LVF has improved since its introduction in August 2021. As of June 30, there are 62 LVF schemes, with commitments over ₹1.34 lakh crore. These schemes have made investments worth nearly ₹60,000 crore, according to Sebi data. It said to further facilitate channelising long term and sizable investments particularly in unlisted securities, reduction in the threshold of investment merits consideration.

"...lowering the minimum threshold to ₹25 crore for LVF scheme is expected to broaden the investor base without compromising on the level of investor sophistication," Sebi said in a discussion paper. Besides, lower entry barriers would facilitate improved fund raising for AIFs.