About
Understanding Alternative Investment Funds
An Alternative Investment Fund (AIF) is a privately pooled investment vehicle registered with SEBI that collects capital from informed investors and invests it according to a defined strategy. AIFs sit outside conventional mutual funds and give investors access to private markets, differentiated equity strategies and structured credit.
SEBI classifies AIFs into three categories based on what they invest in and how they invest. AIFCentral covers the Category II and Category III universe; Category I is explained here for context.
How an AIF works
The three SEBI AIF categories
Category I
Category I AIF
Funds that invest in start-ups, early-stage ventures, social ventures, SMEs, infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable.
- Venture Capital Funds (including Angel Funds)
- SME Funds
- Social Venture Funds / Social Impact Funds
- Infrastructure Funds
- Special Situation Funds
Category II
Category II AIF
Funds which do not fall in Category I or Category III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements, as permitted under the regulations.
- Private equity funds
- Debt funds
- Funds not falling under Category I or Category III
Category III
Category III AIF
Funds which employ diverse or complex trading strategies and may employ leverage, including through investment in listed or unlisted derivatives.
- Hedge funds
- Funds which trade with a view to making short-term returns
- Open-ended or close-ended funds using complex strategies and leverage
Key characteristics of AIFs
01
Privately pooled funds
Capital is pooled privately from informed investors rather than raised from the retail public.
02
Diversified investments
Exposure spans listed equity, private companies, credit, real assets and structured opportunities.
03
Professional fund management
Managed by SEBI-registered investment managers with defined mandates and reporting.
04
Alternative strategies
Strategies go beyond traditional long-only investing — growth, PIPE, credit, hedged and special situations.
JK Capital
The team behind AIFCentral
JK Capital is an AMFI-registered wealth management firm working with families and institutions across India from offices in Chandigarh, Gurugram and Mumbai. AIFCentral is our effort to make India's alternative investment universe easier to discover, compare and understand.
AMFI registered · ARN-252668 · CIN U74110CH2019PTC042758
350+
Families served
₹150 Cr+
Assets managed
8+
Years of experience
ARN-252668
AMFI registered