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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.
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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.
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.

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

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

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

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

Common fees include:

  • Management fee: Charged annually on committed or invested capital

  • Performance fee (carry): A share of profits above a defined hurdle rate

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

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.
AIFs follow prescribed valuation norms and typically appoint independent valuers to ensure fair and transparent valuation of portfolio assets.
Leverage is generally restricted for Category I and II AIFs but is permitted for Category III AIFs, subject to regulatory limits and disclosures.
AIFs provide periodic reports (quarterly or semi-annually) covering portfolio performance, valuations, risk metrics, and fund updates.
Investors typically exit through distributions from asset sales, fund maturity, or secondary transfers of units, subject to fund documents and regulatory approvals.
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