Alternative Investment Funds in India
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What are Alternative Investment Funds (AIFs)?
Bespoke Clientele
Wider Access
Varied Strategies
High Risk – High Reward
Why Choose AIF Investment in India?
Regulated by SEBI
- Strong framework of transparency and investor‑centricity
- Access to private equity, venture capital, alternative strategies
Superior return potential
- Private‑market and niche strategies
- Access to exclusive deals like startups, pre‑IPO, private credit
Fund Management Expertise
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Managed by industry experts and backed by rigorous research
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Actively monitored for optimum long-term wealth creation
Wealth Creation from a Fresh Lens
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Diversification to assets that typically have low correlation
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Access private market products typically unavailable to retail equity/debt investors
How to Invest in AIF India
- Minimum ₹1 crore investment
- Aligned with long horizons and higher risk
01.Choose Category
02.KYC
03.Expert Guidance
04.Last Leg
Why Mirae Asset Sharekhan for Alternative Investment Fund India?
What Are the Benefits of AIFs?
Invest in Non-Traditional Assets
Venture capital, structured credit, real estate, and assets beyond the usual stock/bond mix
Flexibility to Invest
SEBI-registered AIFs aren’t bound by public-market constraints and have more flexibility to invest
Investment Strategies
3 distinct categories of AIFs, each with distinct focus, constraints, risk/return dynamics, and suitability
Alpha Sources beyond Conventional
Ideal for investors seeking alpha sources while being ready to take high risk and accept illiquidity
How Do AIFs Work – Investment Methodology
HNIs and institutions
pool capital into a
professionally managed fund
Fund Manager allocates across the fund’s strategy, monitors holdings, and executes exits
Investors receive returns via capital appreciation, dividends, interest, or structured exits
Types of AIFs
Category I AIFs
Category III AIFs
Category II AIFs
AIF vs PMS
Clear Comparison
Alternative Investment Funds
Portfolio Management Services
Risks and Due Diligence
Risk associated with AIFs
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Liquidity Risk
Most AIFs invest in illiquid assets and exit depends on secondary sales, IPOs, or refinancing.
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Valuation Risk
Portfolio assets are not mark-to-market daily. Valuations rely on assumptions and fund management team's judgement.
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Manager and Execution Risk
Performance dependent on Fund Manager's sourcing, structuring, and exit execution.
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Concentration Risk
AIF portfolios are typically concentrated (10-20 investments), increasing impact of single asset underperformance.
Tax Treatment
Category I and II
Pass-through taxation: Income from such funds is taxed at the investor level and not the fund level, with a requirement to deduct 10% on income credited to the investor
Category III
Fund-level taxation applies; the fund is taxed on gains before distribution.
AIF Eligibility
Ultra HNIs
Family Offices
Institutions
Sophisticated Investors
AIF FAQs – Frequently Asked Questions
An alternative investment fund is a privately pooled investment vehicle that collects funds from investors and invests these funds by a defined investment policy for the benefit of its investors.
Mirae Asset Sharekhan has tied up with several leading providers of AIFs in India in Category I, Category II, and Category III.
Category I AIFs AIFs which invest in:
• Venture capital funds (Including Angel Funds)
• SME Funds • Social Venture Funds
• Infrastructure funds that the government or regulators consider as socially or economically desirable Category
II AIFs AIFs which invest in:
• Real estate funds • Private Equity (PE) funds
• Funds for distressed assets
Category III AIF
Category III AIFs are high-risk, high-return investment vehicles (hedge funds, PIPE funds, and others) in India that employ complex, leveraged strategies across listed and unlisted securities. Targeting sophisticated investors, they allow for active, market-linked strategies like long-short or arbitrage.
As per SEBI regulations, the minimum investment amount is ₹1 crore and above.
Indian residents, Non-Individuals, Companies, LLP, Family Offices can invest in AIFs in India. Foreign Investors, FPIs, and NRIs can invest only through NRO accounts.
Alternative Investment Funds (AIFs) in India have tax treatments that depend on the fund's SEBI category. Category I and II AIFs enjoy pass-through status (taxed at the investor level). Conversely, Category III AIFs are generally taxed at the fund level, except for specialized IFSC funds
Upon investment in the AIF, the units will show up in the demat account of the investor. The value (NAV) of these units will be updated monthly. The investor will receive a statement of accounts on their registered email ID.
The documents required to enable your AIF account are:
• Account Opening Form
• Address Proof
• Identity Proof
• PAN Card Copy
• Relevant KYC Forms prescribed by the regulator Please get in touch with your Wealth Relationship Manager or Mirae Asset Sharekhan representative office near you.
No. Category I and II AIFs are required to be closed ended and have a minimum tenure of three years. Category III AIFs may be open ended or closed ended.
An AIF may accept the following as joint investors for the purpose of investment of not less than ₹1 crore:
a. Investor and his/her spouse
b. Investor and his/her parent
c. Investor and his/her daughter/son
A Note on AIF Investments: AIFs generally have lock-ins, limited redemptions, and complex valuation. AIFs are suitable for investors who understand liquidity constraints, long investment horizons, and higher risks associated with alternative investments. Tax treatment is subject to prevailing tax laws and may vary based on AIF category and investor profile. Investors should seek independent tax advice. AIFs are privately pooled investment vehicles and are intended for sophisticated investors. Investments are subject to liquidity risk, valuation risk, concentration risk, and market risk. Past performance is not indicative of future results.
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Minimum ₹1 crore investment
