Tuesday, 18 July 2017
ALTERNATIVE INVESTMENT FUNDS IN INDIA
Alternative investment funds (AIFs) in India can be any investment from Indian or foreign sources pooled in the form of a trust or company or Limited Liability Partnership (LLP). Investment funds other than the traditional investments modes like stocks, bonds, capital etc come under AIF. AIF does not come under the jurisdiction of any regulatory agency in India. Alternative investment funds include hedge funds, venture capital, financial derivatives and assets like paintings, coins, stamps etc. The gain in these assets can be called capital gains.
According to SEBI (securities and exchange board of India) AIFs can be operated under the three categories:
Category I: The investments that government consider economically and socially viable come under this category. This includes social ventures, infrastructure funds, real estate funds, start-ups etc. They get incentives from government.
Category II: This category will not get any incentives or help from government or any other regulator. They can invest anywhere without raising any dept. Private equity funds dept funds etc come under this category.
Category III: They get short term gains without any concessions or incentives from government and other regulatory body. Open ended funds like hedge funds, alternative investment funds etc are examples.
Both Indian and foreign investors can invest in the AIFs. For the purpose of AIFs the government will do away with categorization of foreign portfolio investors (FPI) and foreign direct investors (FDI). The AIF industry which is in its nascent form in India can be boosted by this decision.
Secura is an investment management company registered under SEBI which provides investment management services to venture capital funds in India, real estate investment trusts, mutual funds etc. It is certified as India’s first Sharia Compliant fund or real estate VCF. Secura mobilize funds from retail investors and pool them in to pool of investment.
AIFs can include investment companies which receives investment from a lot of investors with a view to invest it with a defined investment policy for the benefit of investors. Do not require authorization for collective investments in transferable securities.
Most of the AIFs raise capital from high net worth investors. They do this with reference to certain policies for the benefit of the investors. The dilution of FDI and FPI will ensure ease of flow of investment. These funds offer great returns to both global and domestic investors and take India to a large investment definition.