What are alternative investment funds in India?

Alternative Investment Fund or AIF means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.

What is an alternative investment fund?

An alternative investment is a financial asset that does not fall into one of the conventional investment categories. … Alternative investments include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts.

Who regulates alternative investment funds in India?

Alternative Investment Fund is described under Regulation 2(1)(b) of the Regulation Act, 2012 of Securities and Exchange Board of India (SEBI). AIF can be established in the form of a company or a corporate body or a trust or a Limited Liability Partnership (LLP).

What is Category 2 Alternative Investment Fund?

Category II AIFs are funds which cannot be categorized as Category I AIFs or Category III AIFs. These funds do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the Regulations.

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How do I invest in alternative investment funds?

SEBI registered Alternative Investment Funds of Category III, apply various trading strategies like futures and margin trading, arbitrage and derivatives trading while investing in listed or unlisted derivatives.

What are 4 types of investments?

There are four main investment types, or asset classes, that you can choose from, each with distinct characteristics, risks and benefits.

  • Growth investments. …
  • Shares. …
  • Property. …
  • Defensive investments. …
  • Cash. …
  • Fixed interest.

What are the best alternative investments?

5 Alternative Investments for 2021

  • Peer-to-Peer Lending.
  • Real Estate.
  • Gold.
  • Owning Your Own Business.
  • Equity Crowdfunding.

Is AIF a good investment?

It is oriented towards 25 stocks, with the objective of generating long term capital appreciation by investing in growth companies across market capitalization.

Rank 4 – Vishuddha Capital – Best AIF in India.

AMC Vishuddha Capital
1 Month Return 3.77%
3 Month Return 18.78%
6 Month Return 40.80%
1 Year Return 11.26%

How can I start an alternative investment fund in India?

1,00,000/- to SEBI by way of bank draft in favour of “The Securities and Exchange Board of India”, payable at Mumbai. 3. On receipt of registration/ re-registration fees, SEBI will grant the applicant the certificate of registration as an Alternative Investment Fund.

What is an alternative investment fund Upsc?

Alternate Investment Funds (AIFs) are those that make such a type of investments. … AIFs are thus private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India like RBI, SEBI, IRDA and PFRDA.

What is cat3 AIF?

What are Category III AIFs? AIFs which employ diverse or complex trading strategies and may employ. leverage including through investment in listed or unlisted derivatives. [

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What is the difference between mutual fund and alternative investment fund?

AIFs are high-risk investment vehicles meant for HNIs, with a potential for high returns. … “AIFs give an option of investing in different asset classes that the investor may not have, directly or through mutual funds.

Who can invest in AIFs?

AIFs that invest in SMEs, start-ups, and other smaller businesses with high growth potential, fall under this category. What’s more, the Government of India offers tax incentives to individuals to invest in this category.

What are the risks of AIF?

Risks that have to be monitored generally include market, credit, liquidity, counterparty and operational risks. To set up an effective risk-management framework for its AIFs, an AIFM has to understand the meaning and implications of the respective risks for each individual AIF.

What is the minimum investment in AIF?

Minimum investment by each investor should be Rs1cr or Rs25 lakh (in case of employees/director/fund manager of AIF). Maximum number of investors in each scheme can be 1,000, but 49 in case of Angel Funds. Category I & II AIF can be close-ended only.

What are the different types of alternative investments?

7 Types of Alternative Investments

  • Private Equity. Private equity is a broad category that refers to capital investment made into private companies, or those not listed on a public exchange, such as the New York Stock Exchange. …
  • Private Debt. …
  • Hedge Funds. …
  • Real Estate. …
  • Commodities. …
  • Collectibles. …
  • Structured Products.
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