Alternative Investment Fund

Dear Reader,

This memorandum is meticulously crafted with the primary goal of offering a comprehensive overview of the distinctive characteristics that define the various categories within the domain of Alternative Investment Funds (AIFs). AIFs, by their inherent nature, operate within a dynamic and ever-evolving financial landscape. As such, this memorandum is devoted to equipping you with an insightful guide that delves deep into the fundamental features of diverse AIF categories. It is tailored specifically for individuals who aspire to broaden their knowledge and understanding of these investment instruments.

To facilitate a clearer understanding, we have presented the comparative information in a tabular format:

AIF - Key Pointers

Private & Confidential | Not for Circulation | Reliance Restricted

Sr. No.	#	AIF - I	AIF - II	AIF - III
1	Category of Fund	I	II	III
2	SEBI Application Fees	1,00,000	1,00,000	1,00,000
3	SEBI Registration Fees	5,00,000	10,00,000	15,00,000
4	SEBI per Scheme Fees	1,00,000	1,00,000	1,00,000
5	Permitted Investors:
a.	Indian	✓	✓	✓
b.	Foreign	✓	✓	✓
c.	Non-resident Indian	✓	✓	✓
6	Corpus per Scheme	20Crs	20Crs	20Crs
7	Minimum Investment Per Investor	1Cr	1Cr	1Cr
8	Minimum Investment Per Employees/Directors of AIF	25Lacs	25Lacs	25Lacs
9	Minimum Investment Per Employees/Directors of Manager Entity	25Lacs	25Lacs	25Lacs
10	Minimum Contribution - Continuing Interest of Manager or Sponsor:
a	% to Total Corpus	2.50%	2.50%	2.50%
b	Cap	5Crs	5Crs	5Crs
11	Maximum Number of Investor Per Scheme Except in case of Companies - for which limit as per Companies Act, 2013 will apply i.e. 200 per Scheme	1000	1000	1000
12	Filing of PPM with SEBI through Merchant Banker	Yes	Yes	Yes
13	Close/Open ended	Close-ended	Close-ended	Close/Open-Ended
14	Minimum Tenure of Fund	3 Years	3 Years	3 Years

Sr. No.	​#	AIF - I	​AIF - II	AIF - III
15	Minimum Tenure of Scheme	3 Years	3 Years	3 Years
16	Listing on Stock Exchange	Permitted	Permitted	Permitted for Close-eneded
17	Minimum tradeable lot on Stock Exchange	1Cr	1Cr	1Cr
18	Investment in Foreign Company	✓	✓	✓
19	Co-investment:
a	Co-investment with more favourable terms compared to AIF	X	X	X
b.	Co-investment with variable Exit terms compared to AIF	X	X	X
20	Limit on investing of Investable Funds:
a	Maximum % of total Investable Funds in One Investee entity (directly or indirectly)	25%	25%	10%
b	For Large Value Fund - Accredited Investors - Maximum % of total Investable Funds in One Investee entity (directly or indirectly)	50%	50%	20%
21	Permitted category of Investments: *
a	Venture Capital Undertakings	✓	X	✓
b	Special Purpose Vehicles	✓	X	✓
c	Units of AIF-I	✓	✓	✓
d	Units of AIF-II	✓	✓	✓
e	Units of AIF-III	X	X	✓
f	Hedging	✓	✓	✓
g	Credit default swaps	✓	✓	✓
h	Unlisted Companies	✓	✓	✓

Sr. No.	#	AIF - I	AIF - II	AIF - III
i	Market Making	X	✓	✓
j	SME Company - Lock-in of 1 year	X	✓
k	Derivates	X	X
l	Complex/Structured Products	X	X	✓
m	Deal in physical goods received in Settlement of investment/transaction	X	X	✓
22	Borrowing, except on temporary basis	X	X	✓
23	Appointment of Custodian:
a	Corpus 500crs or more	✓	✓	✓
b	Irrespective of corpus	X	X	✓
24	Appointment of Complaince Officer	✓	✓	✓
25	Report to Unitholders	Half-yearly	Half-yearly	Quarterly
26	Valuation of Investments	Half-yearly	Half-yearly	Quarterly-Close Ended Monthly-Open Ended

* Subject to change

It is of utmost importance to clarify that the intention behind this memorandum is strictly educational, and it should not be interpreted as a solicitation or recommendation or advice. The contents are designed to serve as an informative resource to enhance the readers' comprehension of AIFs. It is vital to underscore that the information contained herein does not serve as a substitute for personalized advice.

For the most up-to-date regulatory information and developments, our primary source is the Securities and Exchange Board of India (SEBI), ensuring that the information provided herein is current as of August 18, 2023.