As hinted by the name of this financial instrument, Alternative Investment Funds (AIFs) focus on parallel investment avenues other than equity and debt. Typically, asset classes of AIFs include private equity, hedge funds, real estate etc.
The SEBI-mandated minimum ticket size for AIFs is INR 1.00 Crore.
Fund Pooling
Investors benefit from capital pools from other investors that get invested into the alternative asset classes.
Added Diversification
Investors get to dabble in alternative asset classes that make a great addition to their portfolios.
AIF Categories
AIFs are classified into 3 categories depending on the kind of asset classes that the fund invests in.
- Category I AIFs invest in small businesses, start-ups, social initiatives, bootstrapped ventures, angel funds etc. In general, this category of alternative investment funds target opportunities that have a tremendous opportunity for growth.
- Category II AIFs include investments in index funds, private equity funds, and debt instruments.
- This AIF category is ideal for those investors who are willing to invest in a high-risk high-reward environment. Category III AIFs implement a great deal of complex trading strategies to generate higher returns. The asset classes for this category include hedge funds and Private Investments in Public Equity (PIPE) funds.
Why get into AIFs?
• Provides the flexibility to invest in derivatives, listed and unlisted equity shares, real estate, hedge funds etc.
• Offers higher rewards against the higher risks involved in the AIF asset classes.
• AIF asset classes are not correlated to the stock market and hence have low volatility.
Disclaimer
Pickle-Jar Investments Private Limited (CIN. U67100PN2021PTC201233) is a NISM Certified / AMFI Registered Mutual Fund Distributor registered with the Association of Mutual Funds in India (AMFI), holding ARN No. 184140 valid upto 12 Aug 2027. We are not Registered Investment Advisors (RIA) as defined by the SEBI (Investment Advisers) Regulations, 2013 and do not provide investment advice on any SEBI regulated products. We do not charge any fees to our clients. We receive remuneration by way of commission / Brokerage from the Mutual Funds/ Asset Management Companies.
Mutual Funds investments are subject to market risks. Please read all Scheme related documents carefully before investing. Past performance of schemes may or may not be sustained in future. We advise investors to read data and risk factors of various mutual fund schemes available in the Scheme Information Document (SID), Statement of Additional Information (SAI), Key Information Memorandum (KIM) etc.