Smart things to know about Alternative Investment Fund

1. AIF comes under Sebi ( Alternative Investment Fund) Regulations 2012 and covers investments which do not happen via the traditional modes of investment such as listed stocks, bonds, cash, property etc.

2. These funds are established in India in various formats like trusts, companies, limited liability partnership etc and are allowed to operate under three categories.

3. Category I get incentive from the government and include social venture funds, infrastructure funds, venture capital funds, SME funds etc.

4. Category II are not given any special incentives or concessions and can invest anywhere without raising debt. They can consider the latter route to meet daily requirements. Private equity funds, debt funds etc. are included in this category.

5. Category III operate to make short-term gains and come without any concessions. Hedge funds are included here.

Content courtesy: Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.