Market regulator Securities and Exchange Board of India (SEBI) on 1 December 2014 allowed as many as 123 entities to set up Alternative Investment Funds (AIFs).
The 123 Alternative Investment Funds (AIFs) have been registered with the Securities and Exchange Board of India (SEBI) since July 2012.
Of these, around 34 entities got the approval of SEBI to operate so far in 2014, 67 in 2013 and the remaining 22 in 2011.
The AIFs that have registered with SEBI in November 2014 are Religare Dynamic Trust, Indus Way Emerging Market Fund and Carpediem Capital Partners Fund and those registered in October 2014 are Singular India Opportunities Trust.
What is Alternative Investment Funds?
AIFs are basically funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy.
Under SEBI guidelines, AIFs can operate broadly in three categories. The SEBI rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others.
The Category I: AIFs are those funds that get incentives from the government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.
The Category III: AIFs are those trading with a view to making short term returns and it includes hedge funds, among others.
The Category II: AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day to day operational requirements.
These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of above two other categories.
When: 1 December 2014