An Alternative Investment Fund (AIF) is a privately managed investment pool that gathers capital from sophisticated investors, both local and international, to follow a specific investment strategy for the benefit of its investors. AIFs are divided into three main categories based on their investment objectives.
– These funds primarily focus on early-stage investments in equity and debt instruments. This category includes venture capital funds (including angel funds), funds supporting small and medium-sized enterprises (SMEs), social venture funds, and infrastructure funds.
– Category II encompasses funds that invest in alternative assets such as real estate and unconventional strategies related to unlisted equities, which do not fit within the definitions of Category I or Category III AIFs.
– Category III AIFs predominantly engage in investments in the public equities market using diverse strategies, often including derivatives. These funds are commonly known as hedge funds.
