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Alternative Investment Funds (AIFs) are privately pooled investment vehicles that invest in alternative assets like private equity, venture capital, hedge funds, and infrastructure. They require a minimum investment of ₹1 crore and are meant for HNIs and institutional investors.
Minimum Investment
₹1 Crore
Minimum ticket size mandated for HNIs, Ultra-HNIs, & Institutional Investors.
Lock-in Period
Flexible (0 to 10 Yrs)
Varies from No Lock-in (open-ended) up to 10 years depending on the fund strategy.
Cash Flow Options
Payouts or Growth
Defined periodic cash flows (Quarterly or Yearly payouts) or Capital Growth options.
Taxation Rules
Category Dependent
Category I & II taxed at Investor hands. Category III taxed at Fund level.
Alternative Assets
Private & Real Assets
Invests in Private Equity, Venture Capital, Hedge Funds, & Infrastructure.
Target Audience
HNIs & Institutions
Tailored for high-net-worth investors seeking non-traditional market exposure.
AIF Structure & Tax Breakdown
AIFs are categorized into three distinct frameworks by SEBI depending on their underlying asset classes and investment strategies.
Social & Early-Stage Capital
Assets: Venture Capital, Angel Funds, SME Funds, Social Venture & Infrastructure Funds.
Pass-through status (Taxed directly at the hands of the Investor).
Private Equity & Real Estate
Assets: Private Equity (PE) Funds, Debt Funds, Real Estate Funds, & Special Situation Funds.
Pass-through status (Taxed directly at the hands of the Investor).
Hedge Funds & Trading Strategies
Assets: Hedge Funds, Long-Short Equity Funds, Derivative Trading & PIPE Strategies.
Taxed at the Fund level (No pass-through status).
Flexible Lock-in Terms
Various AIF strategies feature distinct lock-in durations ranging from No Lock-in (open-ended hedge strategies) up to 10 years of lock-in for long-term venture capital, infrastructure, or real estate development funds.
Custom Cash Flow Structure
Investors can choose funds structured for regular liquidity with defined cash flows (e.g., Quarterly or Yearly dividend/yield payouts) or opt for pure Growth strategies compounding value over time.
Looking to Explore Alternative Investment Funds?
Connect with our wealth advisors at Litm Financial Pvt Ltd to evaluate Category I, II, and III AIF opportunities suitable for your portfolio.