ALTERNATIVE INVESTMENT FUND

Page Title

Home / ALTERNATIVE INVESTMENT FUND

Alternative Investment Fund

Alternative Investment Fund or AIF is a privately pooled investment vehicle that invests in alternative asset classes such as private equity, venture capital, hedge funds, real estate, commodities, and derivatives. Generally, HNIs (High net worth individuals) and institutions invest in the AIFs as the investment amount is substantially higher.

AIFs are regulated by the SEBI (Securities and Exchange Board of India). As per the SEBI (Alternative Investment Funds) Regulations, 2012, an AIF can be set up as a trust, a company, a limited liability partnership, or a corporate body. However, many of the AIFs that have been registered with SEBI are in the form of trusts & the minimum investment amount is Rs 100,00,000.

Link Name

Why invest in AIFs?

AIFs can be an attractive option for some investors seeking diversification and potentially higher returns outside traditional asset classes like stocks and bonds. Here are some reasons why investors might consider investing in AIFs:

  • Potential for Higher Returns: AIFs may offer higher returns than traditional investments due to their exposure to a broader range of assets and investment strategies. However, this higher return also comes with higher risk.

  • Portfolio Diversification: By giving investors access to alternative asset classes, including hedge funds, real estate, and private equity, AIFs help them diversify their portfolios.

  • Low Volatility: AIFs are unrelated to the stock market and, hence, are less volatile than other investments like equity or mutual funds’ investments.