Category I
Invest in early-stage or socially important areas; long horizons and limited liquidity.
- Venture capital & angel funds
- SME funds
- Infrastructure funds
- Social impact funds
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Alternative Investment Funds
Access to private and alternative strategies.
Alternative Investment Funds (AIFs) are privately pooled, SEBI-regulated funds that can invest beyond listed shares and bonds: in private companies, private credit, real estate or long-short strategies. They usually involve large commitments, limited liquidity and a multi-year horizon.
At a glance
- Regulator
- SEBI
- Minimum
- ₹1 crore for most investors
- Structure
- Category I, II or III
- Tenure
- Cat I & II: at least 3 years, closed-ended
- Investing
- Often drawn down in stages over time
- Our role
- We distribute; the fund manager runs the fund
Terms vary by fund and category. Read the Private Placement Memorandum before investing.
What it is
Each AIF is registered with SEBI and follows a strategy set out in its Private Placement Memorandum (PPM), run by its investment manager. Your units are held in demat form.
Category I and II funds are closed-ended, so money is committed for the life of the fund, usually several years. Category III funds can be open- or closed-ended.
- 011
You commit
₹1 crore or more, signing up to the fund’s terms.
- 022
Capital is called
In many funds, in stages as the manager finds investments.
- 033
The manager invests
As set out in the PPM; your money may be hard to access for years.
- 044
You receive proceeds
As investments are exited, or by redemption where offered; not assured.
Categories of AIF
SEBI groups AIFs into three categories. The category is a broad guide, and the lists below are examples; each fund’s strategy, terms, liquidity and risks are set out in its Private Placement Memorandum (PPM).
Category II
Private equity, private credit and real estate. Closed-ended, and may borrow only for short-term needs.
- Private equity
- Private credit
- Real estate
- Funds of funds
Category III
Trading strategies such as long-short or arbitrage, which may use derivatives and leverage. Values can fluctuate significantly.
- Long-short equity
- Hedge strategies
- Arbitrage & market-neutral
Is it for you?
May be worth exploring if you…
- Can commit ₹1 crore or more
- Can leave the money invested for several years
- Already hold a broad base of mutual funds or other core investments
- Understand unlisted and complex investments
Pause and consider if you…
- Need guaranteed returns or guaranteed capital
- May need this money within the fund’s life
- Prefer simple, daily-priced products
- Would find irregular capital calls hard to manage
This is general information, not an assessment of your suitability, which depends on your circumstances and the specific scheme or product.
Safeguards
- Regulated by SEBI under the AIF Regulations, 2012
- Private Placement Memorandum in a SEBI-prescribed format
- Assets held with a custodian; units held in demat form
- Valued by an independent valuer, at intervals SEBI sets
- Regular reporting to investors, and annual audits of PPM compliance
Regulation and risk labels do not guarantee returns or prevent losses.
Risks & costs to know
- Market and business risk: investments can fall in value or fail
- Liquidity: money is usually locked in, with limited ways to exit early
- Valuation: unlisted assets are valued periodically, and sale proceeds may differ
- Concentration and leverage: a fund may hold few investments, and leverage, where used, can magnify losses
- Costs: management fees and, where applicable, carried interest reduce returns
Have a concern?Our service: escalation matrix · A fund, scheme or issue: its provider first · Still unresolved: SEBI SCORES or SMART ODR
How we help
- 1Step 1
Listen
We understand your goals, time horizon, existing holdings and comfort with risk.
- 2Step 2
Explain options
We set out relevant options from regulated providers, with costs, liquidity and risks side by side.
- 3Step 3
You decide, we coordinate
Once you decide, we help with KYC, paperwork and onboarding with the provider.
- 4Step 4
Review
Supported holdings appear in our app, and we review them with you as markets and life change.
You decide whether to invest, in what, and on what terms. How we are paid for each product is disclosed before you invest. See how we’re paid →
Common questions
Short answers to what families ask us most. For anything specific to your situation, talk to us.
Still have a question?Mon–Fri, 8:00 AM – 6:00 PM · Sat, 9:00 AM – 3:00 PM IST
Can I lose money?
Yes. AIFs can invest in unlisted, early-stage or leveraged positions, and some investments may fail. Returns are not guaranteed.
How is an AIF different from PMS?
An AIF pools money from investors and can invest in unlisted assets; you hold units. In PMS, listed securities are held directly in your own demat account.
What is a capital call?
Many Category I and II funds don’t take your full commitment upfront. They “call” it in stages as they find investments, usually with a few days’ notice. For example, a fund might call a quarter of your commitment at the start and the rest over later calls; the PPM sets out how this works.
Can I withdraw before the fund ends?
Usually not in Category I and II funds, which are closed-ended. Some Category III funds allow periodic redemption, as set out in the PPM.
What fees are charged?
Typically a management fee, and carried interest (a share of profits above an agreed hurdle). All fees are set out in the PPM and contribution agreement.
Is the ₹1 crore minimum the same for everyone?
For most investors, yes. It is ₹25 lakh for the fund’s own employees and directors, and accredited investors may have different terms.
How are AIFs taxed?
It depends on the category. Category I and II funds are generally pass-through, so income is taxed in your hands; Category III funds are generally taxed at fund level. Please consult your tax adviser.
Can I invest directly, without a distributor?
Yes. AIFs offer a direct option without a distributor. If you invest through us, we are paid by the fund manager, and this is disclosed before you invest.
Talk it through before you decide.
We’ll explain the options and trade-offs. You decide.
AIF investments are subject to market risks and are suitable only for eligible investors. Read the Private Placement Memorandum carefully before investing.