06 — AIF
Alternative Investment Funds
Private, differentiated strategies — beyond public markets.
SEBI-registered Category I, II, and III AIFs — long-short equity, private credit, venture, real estate, and structured products. Access reserved for sophisticated investors.
AIFs are privately pooled investment vehicles regulated by SEBI. They pursue strategies that public-market funds structurally cannot — long-short, private credit, venture, and thematic long-only.
- Horizon
- 3 – 10 years (strategy-dependent)
- Risk
- Moderate – Very High
- Liquidity
- Locked / periodic (per Category)
- Ticket size
- ₹1 Cr (SEBI minimum)
How it works
A four-step processCategorise the need
Cat II for private credit and venture; Cat III for long-short and market-neutral.
Diligence the GP
Track record, team continuity, alignment of carry, and prior fund vintages — no shortcut here.
Commit and draw
Capital called in tranches; deployment paced over 2–4 years for closed-end structures.
Track distributions
Quarterly NAV, capital-call schedules, DPI/RVPI tracking, and independent audit.
Chapter — Fit
Who this is for.
Alternative Investment Funds is not for every investor — and that is the point. We choose it deliberately, when the mandate calls for it.
- 01Sophisticated investors with ₹5 Cr+ liquid net worth
- 02Family offices seeking non-correlated returns
- 03Investors comfortable with lock-ups and drawdowns
- 04Portfolios needing genuine diversification beyond MFs
Why it works
Structural advantagesDifferentiated returns
Access to strategies unavailable in public-market vehicles.
Lower correlation
Long-short and private credit smooth portfolio drawdowns.
Institutional access
GP relationships and allocation preference for our clients.
Structural alpha
Illiquidity premium, complexity premium, and manager skill — properly compensated.
Reference — SEBI AIF Categories
Regulatory frameworkUnder the SEBI (Alternative Investment Funds) Regulations, 2012, applicants may seek registration in one of the following categories.
01
Category I AIF
Invests in start-ups, early-stage ventures, social ventures, SMEs, infrastructure, and other socially or economically desirable sectors — includes Venture Capital, Angel, SME, Social Venture, and Infrastructure Funds.
02
Category II AIF
Funds that do not fall in Category I or III and do not undertake leverage other than for day-to-day operations — includes real estate funds, private equity funds, and distressed-asset funds.
03
Category III AIF
Employ diverse or complex trading strategies, and may use leverage including through listed or unlisted derivatives — includes hedge funds and PIPE Funds.
- 01
AIFs collect capital from sophisticated investors — Indian or foreign — for investment per a defined policy under Regulation 2(1)(b).
- 02
AIF excludes mutual funds, collective investment schemes, and certain family trusts, employee welfare trusts, and holding company arrangements.
Considerations
What we tell you before you commit.
- 01
Illiquidity — most Cat II AIFs lock capital for 5–8 years.
- 02
Higher fees (2/20 typical) — must clear the alpha bar.
- 03
Concentration and manager risk are structural, not incidental.
Frequently asked
Answered plainlyCat II is closed-end (private credit, venture); Cat III is open/close-ended, uses leverage and shorting (long-short, arbitrage).
Cat I/II have pass-through status; Cat III is taxed at the fund level. Structure and jurisdiction matter — we plan pre-commit.
Ready to explore this route for your portfolio?
A private, no-obligation conversation with one of our advisers — begin with your mandate, not a product.