What is an Alternate Investment Fund -AIF - for competitive exams like UPSC,SSC..etc

AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities. Further, certain exemptions from registration are provided under the AIF Regulations to family trusts set up for the benefit of 'relatives‘ as defined under the Companies Act, 1956, employee welfare trusts or gratuity trusts set up for the benefit of employees, 'holding companies within the meaning of Section 4 of the Companies Act, 1956 etc.

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.

AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities.

Further, certain exemptions from registration are provided under the AIF Regulations to family trusts set up for the benefit of 'relatives‘ as defined under the Companies Act, 1956, employee welfare trusts or gratuity trusts set up for the benefit of employees, 'holding companies within the meaning of Section 4 of the Companies Act, 1956 etc. 

In what categories can an applicant seek registration as an AIF? Applicants can seek registration as an AIF in one of the following categories, and in sub-categories thereof, as may be applicable: [Ref. Regulation 3(4)] 

Category I AIF: 

  • Venture capital funds (Including Angel Funds) 
  • SME Funds o Social Venture Funds 
  • Infrastructure funds 
  • Category II AIF 
  • Category III AIF