Alternative Investment Funds (AIFs) are pooled investment vehicles that gather funds from investors and invest them according to a defined strategy.AIFs differ from traditional investment options like mutual funds and stocks, focusing on specialized assets like real estate, private equity, hedge funds, and venture capital.
Category I AIFs: Focuses on investments in start-ups, early-stage ventures, social ventures, and other sectors deemed socially or economically beneficial. Examples include venture capital funds, SME funds, and infrastructure funds.
Category II AIFs: Includes funds that do not fall under Category I or III and do not undertake leverage other than to meet day-to-day operational requirements. Private equity funds and debt funds fall under this category.
Category III AIFs: Employs diverse or complex trading strategies including investment in listed or unlisted derivatives. Hedge funds are a primary example.
