Alternative Investment Funds (AIF)

Alternative Investment Funds

Alternative investment funds are investment solutions that allow investors to participate in exclusive opportunities beyond traditional stocks and mutual funds with the aim of creating superior long-term wealth.

Our AIF Solutions

Our Alternative Investment Fund solutions are designed for investors seeking access to differentiated opportunities beyond traditional assets:

Category III AIF strategies

Private placement investments

Diversified alternative exposure

Professionally managed structures

Long-term capital appreciation focus

Key Benefits of Investing with Infinite Alpha

Guided mutual fund investing provides you with the expertise, discipline, and support needed to navigate markets confidently and work toward your financial goals.

Access to Unique Opportunities

Better Portfolio Diversification

Higher Return Potential

Strategy-Led Investing

Long-Term Wealth Creation

Professional, Research-Driven Management

Start Your AIF Journey with Confidence

Take the next step toward disciplined, goal-based mutual fund investing with Infinite Alpha. Our expert team is ready to guide you through every stage of your investment journey.

Frequently Asked Questions

Helpful information to guide you through common queries.

What is an Alternative Investment Fund (AIF)?

An AIF is a privately pooled investment vehicle that invests in assets or strategies beyond traditional stocks, bonds, and mutual funds, such as private equity, real estate, infrastructure, credit, or hedge fund strategies.

How are AIFs regulated?

In India, AIFs are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Alternative Investment Funds) Regulations, which govern fund structure, operations, disclosures, and investor protection.

What are the categories of AIFs?

AIFs are classified into three categories:

Category I: Venture capital, SME, social venture, infrastructure funds
Category II: Private equity, debt, fund of funds
Category III: Hedge funds and funds using complex or leveraged strategies

Who can invest in an AIF?

AIFs are intended for sophisticated investors, such as high-net-worth individuals (HNIs), family offices, institutions, and accredited investors who can understand and bear higher risks.

What is the minimum investment amount?

The minimum investment amount per investor is typically ₹1 crore, subject to SEBI regulations and specific fund terms (lower thresholds may apply to employees or directors of the fund).

What is the typical tenure of an AIF?

Most AIFs have a fixed tenure ranging from 5 to 10 years, with possible extensions, depending on the investment strategy and asset class.

Are AIF investments liquid?

AIFs are generally illiquid investments. Investors usually cannot redeem units on demand and must wait for exits or distributions as investments mature.

How do AIFs generate returns?

Returns are generated through capital appreciation, income generation, or strategic exits, depending on the fund’s investment strategy and underlying assets.

What fees are charged by AIFs?

Common fees include:

Management fee: Charged annually on committed or invested capital
Performance fee (carry): A share of profits above a defined hurdle rate

What are the risks involved in AIF investments?

Risks may include market risk, illiquidity, leverage risk (especially in Category III), concentration risk, regulatory changes, and valuation uncertainty.

How are AIFs taxed?

Tax treatment depends on the AIF category and underlying income. In India, Category I and II AIFs generally enjoy pass-through taxation, while Category III AIFs are taxed at the fund level, subject to prevailing tax laws.

How is portfolio valuation carried out?

AIFs follow prescribed valuation norms and typically appoint independent valuers to ensure fair and transparent valuation of portfolio assets.

Can AIFs borrow or use leverage?

Leverage is generally restricted for Category I and II AIFs but is permitted for Category III AIFs, subject to regulatory limits and disclosures.

How often will investors receive reports?

AIFs provide periodic reports (quarterly or semi-annually) covering portfolio performance, valuations, risk metrics, and fund updates.

How can an investor exit an AIF?

Investors typically exit through distributions from asset sales, fund maturity, or secondary transfers of units, subject to fund documents and regulatory approvals.

Alternative Investment Funds (AIF)