Alternative Investment Funds (AIFs)
In India, SEBI categorizes Alternative Investment Funds (AIFs) into three types based on their investment strategy: Category I focuses on socially/economically desirable sectors (startups, SMEs, infra); Category II includes Private Equity, Debt Funds, etc., not using leverage or complex strategies; and Category III uses complex trading, leverage, and derivatives (Hedge Funds, PIPE Funds) for high returns. Here's a breakdown: • Category I AIFs (Growth-Oriented) • Invest in sectors deemed important for economic/social development. • Examples: Venture Capital Funds (VCFs), Angel Funds, SME Funds, Infrastructure Funds, Social Venture Funds. • Goal: Foster growth in early-stage ventures and key industries. • Category II AIFs (Private Equity & Debt) • A broad category for funds not fitting into I or III, typically avoiding excessive leverage. • Examples: Private Equity Funds, Debt Funds, Fund of Funds, Real Esta...