Invest Universe helps eligible investors access Alternative Investment Funds (AIFs) – privately pooled investment vehicles that invest in strategies and asset classes not typically available through mutual funds, such as unlisted equity, private credit, real estate, structured debt, and long-short listed equity strategies. AIFs are regulated by the Securities and Exchange Board of India under the SEBI (Alternative Investment Funds) Regulations, 2012. [Confirm and adjust wording below based on whether you distribute third-party AIFs, or are the Sponsor/Investment Manager of your own AIF – the two roles carry very different regulatory obligations.]

1. What is an Alternative Investment Fund?

An AIF is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing in accordance with a defined investment policy for the benefit of its investors. AIFs are structured as trusts, companies, LLPs, or body corporates, and are registered with SEBI under one of three categories based on the nature of their investment strategy.

2. Categories of AIFs.

1. Category I AIF – Funds that invest in start-ups, early-stage ventures, SMEs, social ventures, infrastructure, or other sectors considered socially or economically desirable by the government or regulators. Includes venture capital funds, SME funds, social venture funds, and infrastructure funds.


2. Category II AIF – Funds that do not fall under Category I or III and do not undertake leverage other than to meet day-to-day operational requirements. Includes private equity funds, debt funds, and fund-of-funds.


3. Category III AIF – Funds that employ diverse or complex trading strategies and may use leverage, including through investment in listed or unlisted derivatives. Includes hedge funds and long-short equity funds.

[List the specific AIFs/schemes you offer under each category, or state which category(ies) you focus on.]

3. Who is an AIF Suitable For?

AIFs are meant for sophisticated investors who understand the risks of investing in less liquid, often long-tenure strategies, and who can commit capital for the fund's stated investment horizon. As per SEBI (Alternative Investment Funds) Regulations, 2012, the minimum investment amount per investor is ₹1,00,00,000 (Rupees One Crore), except in the case of employees or directors of the AIF or its manager, where the minimum is ₹25,00,000 (Rupees Twenty-Five Lakh). [Confirm current SEBI-mandated minimums and any higher thresholds specific to the schemes you offer.]

4. Key Features of AIFs.

• Privately pooled vehicles, not offered to the general public through a prospectus


• Typically close-ended with a defined fund tenure (commonly 3–10 years, depending on category and strategy)


• Lower liquidity compared to mutual funds – investors are usually locked in for the fund's tenure, subject to the terms of the Private Placement Memorandum (PPM)


• Capital is typically drawn down over time rather than invested as a lump sum upfront, depending on the fund structure

5. Fees and Charges.

AIF fee structures vary by scheme and are set out in each fund's Private Placement Memorandum. They typically include a combination of the following:

• Management Fee (charged as a percentage of committed or invested capital, typically on an annual basis)


• Performance Fee / Carried Interest (charged on profits above a pre-agreed hurdle rate)


• Setup fees, operating expenses, and other charges as disclosed in the specific fund's offer documents

[Confirm whether you charge any distribution-related fee/commission on top of what the AIF itself charges, and disclose it here in line with your regulatory obligations.]

6. How to Get Started.

1. Discuss your investment objectives, risk appetite, and liquidity needs with our team to identify AIF categories and schemes that may be suitable for you.


2. Review the Private Placement Memorandum (PPM) of the specific scheme(s) you are considering, which contains full details of the strategy, risk factors, fees, and terms.


3. Complete your KYC and provide the necessary onboarding documents (PAN, address proof, bank details, and other documents as required under KYC and FATCA/CRS norms).


4. Sign the contribution agreement and make your capital commitment as per the fund's drawdown schedule.


5. Receive periodic statements and reports from the fund as per SEBI-mandated reporting timelines.

7. Risk Factors.

Investments in Alternative Investment Funds are subject to market, credit, liquidity, and other risks, and there is no assurance that the investment objectives of any scheme will be achieved. AIFs, particularly Category II and III strategies, may be illiquid, may use leverage, and may invest in unlisted or thinly traded securities, all of which can increase risk. Past performance of any fund or its manager is not indicative of future performance. Investors are strongly advised to read the Private Placement Memorandum and all related risk disclosures carefully before making a commitment.