Aasaannivesh

HDB Financial ₹1,240 ▲ +2.1% Orbis Financial ₹680 ▲ +1.4% Tata Capital ₹960 ▼ −0.8% NSE (Pre-IPO) ₹2,100 ▲ +3.2% Onix Renewable ₹420 ▲ +0.9% Studds Accessories ₹810 ▲ +1.7% Kotak ₹8900 ▲ +1.7%
Menu
Book a Call

AIF

Alternate Investment Funds (AIF) — Exclusive access to private equity, venture capital & structured strategies. Minimum ₹1 Crore. For accredited HNI investors only.

Home › Services › AIF

Alternate Investment Funds

Beyond Mutual Funds.
Beyond the Market.
Into Real Alpha.

AIFs give sophisticated investors access to private equity, venture capital, hedge strategies, and structured credit — opportunities that have historically delivered superior risk-adjusted returns uncorrelated with public markets. Aasaan Nivesh brings this exclusive access directly to you.

📞 Check My Eligibility
Explore Categories

Minimum investment: ₹1 Crore · SEBI regulated · HNI / UHNI investors

AIF AT A GLANCE

RegulatorSEBI — AIF Regulations 2012
Minimum Investment₹1 Crore per investor
CategoriesCat I, Cat II, Cat III
Max Investors / Scheme1,000 (49 for Angel Funds)
Lock-in Period3–10 years (varies by fund)
Industry AUM (Dec 2025)₹15.74 lakh crore
5-Year Industry CAGR~30%
Who Can InvestHNIs, NRIs, Institutions
💡 Aasaan Nivesh is a Centricity PMS & AIF distribution partner. We curate the best AIF options for each client’s risk profile and help with end-to-end onboarding.

Understanding AIFs

What is an Alternate Investment Fund — and Why Do HNIs Choose It?

An Alternate Investment Fund (AIF) is a privately pooled investment vehicle regulated by SEBI under the AIF Regulations, 2012. Unlike mutual funds, which are open to all retail investors, AIFs are designed exclusively for sophisticated investors — HNIs, family offices, and institutions — who can commit a minimum of ₹1 crore.

AIFs invest in asset classes and strategies that are simply not available through traditional mutual funds or PMS — private equity in unlisted companies, venture capital in high-growth startups, structured credit, real estate credit, long-short hedge strategies, and pre-IPO opportunities.

“AIFs are where India’s serious wealth creators have been quietly building outsized returns — often uncorrelated with the Nifty.”

As of December 2025, India’s AIF industry manages over ₹15.74 lakh crore in commitments — growing at a 5-year CAGR of over 30%, driven by India’s rising HNI population, maturing private markets, and the increasing recognition that asset allocation beyond public equities is essential for true wealth preservation.

India’s AIF Industry — By the Numbers

₹15.74L Cr
Total AIF commitments as of December 2025
~30%
5-year CAGR of AIF industry commitments
1,550+
SEBI-registered AIFs in India as of 2025
75%
AIFs that have generated positive alpha vs benchmarks
80–90%
Share of HNIs & family offices in Cat I & II AIF inflows

AIF STRUCTURE

The Three Categories of AIFs — Explained Simply

SEBI classifies AIFs into three distinct categories based on investment mandate, risk, and strategy. Each suits a different investor objective.

Category I AIF

🌱 Venture Capital, Startups & Social Impact Funds

Category I AIFs invest in sectors that the government considers socially or economically beneficial — startups, early-stage companies, SMEs, infrastructure, and social ventures. These funds often enjoy government incentives and tax pass-through benefits.

If you believe India’s next decade of growth will be driven by its startups and innovation ecosystem, Category I AIFs offer a structured, SEBI-regulated way to invest in that story — with professional fund managers doing the due diligence you can’t do alone.

TYPES OF FUNDS IN CATEGORY I

Venture Capital Funds (VCF)Angel Funds (min ₹25 lakh)Social Venture FundsInfrastructure FundsSME Funds
Min Investment₹1 Crore (₹25L for Angel)
Fund StructureClose-ended
Min Tenure3 years
LeverageNot permitted
Tax TreatmentPass-through (investor taxed)
Risk LevelHigh (early-stage companies)
Return PotentialVery High (10–20+ year horizon)
✅ Best for: Investors with a long horizon (7–15 years), high risk appetite, and interest in India’s startup ecosystem and innovation economy.

Category II AIF

🏦 Private Equity, Debt Funds & Real Asset Credit

Category II AIFs are the most popular among Indian HNIs. They invest in private equity (unlisted companies), structured debt, real estate credit, special situations, and distressed assets. These funds operate without leverage and are designed for steady, long-term compounding in private markets.

Category II is particularly compelling for investors who want returns uncorrelated with public equity markets — especially during periods of market volatility. Private credit funds in this category have delivered consistent 14–18% returns with lower volatility than equity.

TYPES OF FUNDS IN CATEGORY II

Private Equity FundsPrivate Credit / Debt FundsReal Estate Credit FundsFund of Funds (AIF)Distressed Asset FundsSpecial Situations Funds

Min Investment₹1 Crore
Fund StructureClose-ended
Typical Tenure5–10 years
LeverageNot permitted
Tax TreatmentPass-through (investor taxed)
LTCG (from FY26)        Taxed as capital gains @ 12.5%
Risk LevelModerate to High
Return Potential14–20% IRR (fund-dependent)
✅ Best for: HNIs with ₹1 Cr+ seeking private market exposure, yield enhancement over fixed income, or diversification away from public equity volatility.

Category III AIF

⚡ Hedge Funds, Long-Short & Complex Trading Strategies

Category III AIFs use sophisticated trading strategies — long-short equity, arbitrage, derivatives, PIPE investments, and macro strategies — to generate absolute returns regardless of market direction. These are the only AIFs permitted to use leverage and to invest in listed securities like a hedge fund.

These funds are managed by highly specialized fund managers and are suited for investors who want market-neutral or absolute-return strategies that can generate alpha whether markets are rising or falling.

TYPES OF FUNDS IN CATEGORY III

Long-Short Equity FundsHedge FundsPIPE FundsDerivatives / Quant FundsArbitrage FundsGlobal Macro Funds
Min Investment₹1 Crore
Fund StructureOpen or Close-ended
TenureVaries (1–3+ years)
LeverageUp to 2x NAV (permitted)
Tax TreatmentTaxed at AIF level
Risk LevelHigh to Very High
Return PotentialAbsolute return — market-neutral
✅ Best for: Sophisticated investors seeking market-neutral or absolute returns, hedging strategies, or exposure to quant/systematic investing beyond traditional equity.

HOW AIFS COMPARE

AIF vs Mutual Fund vs PMS — Which is Right for You?

These three instruments serve different investor profiles and goals. Understanding where each fits will help you build the optimal portfolio.

Feature Mutual Fund PMS AIF ★
Minimum Investment ₹500 / month SIP ₹50 Lakh ₹1 Crore
Asset Classes Listed equities & debt Listed equities Private equity, credit, hedge, VC, RE
Market Correlation High High Low (uncorrelated alpha)
Personalisation None (pooled) Moderate High — dedicated fund mandate
Leverage Permitted No No Yes (Cat III only, up to 2x)
Liquidity High (T+2 days) Moderate Low (lock-in 3–10 yrs)
Investor Cap / Fund Unlimited Unlimited 1,000 (exclusive access)
Tax on Gains (Cat I & II) Fund-level tax Investor-level Pass-through — investor taxed

INVESTOR SUITABILITY

Who Should Consider an AIF?

AIFs are not for everyone — and that’s by design. Here are the investor profiles that are typically a strong fit.

👨‍💼

HNI / UHNI Investors

Individuals with ₹1 crore+ in investable surplus who want exposure beyond public equities and are comfortable with 3–7 year lock-ins.

🏢

Business Owners & Entrepreneurs

Business owners deploying profits into structured alternatives — private credit or PE funds that align with their understanding of business risk.

🌍

NRIs & Returning NRIs

NRIs seeking structured exposure to India’s private markets via FEMA-compliant AIF structures. Eligible for most Cat I and II AIFs.

🏠

Family Offices & Trusts

Families managing multi-generational wealth who need sophisticated asset allocation beyond listed equities and traditional fixed income.

💼

Senior Corporate Professionals

CXOs and senior professionals with ESOP monetisations, retirement payouts, or bonus deployments seeking structured long-term investment vehicles.

📊

Investors Seeking Diversification

Investors with large PMS or equity portfolios who want to add uncorrelated return streams — private credit, PE, or hedge strategies — to reduce overall portfolio risk.

HONEST ASSESSMENT

AIFs Are Not For Everyone. Here's Who Should — and Shouldn't — Consider Them.

At Aasaan Nivesh, we believe in transparent advice. We will tell you if an AIF is right for your situation — or if a mutual fund or PMS is a better fit.

✅ Consider AIFs If You…

✓ Have at least ₹1 crore in surplus capital you don’t need for 3–7 years
✓ Want returns uncorrelated with the Nifty and Sensex
✓ Have a high risk appetite and understand illiquidity risk
✓ Want access to private equity, VC, or structured credit
✓ Are building a sophisticated portfolio beyond mutual funds and PMS
✓ Want tax-efficient pass-through structures (Cat I & II)

⚠️ Avoid AIFs If You…

✗ May need the invested capital back within 3 years — liquidity is very limited
✗ Cannot commit ₹1 crore minimum without stretching your overall financial plan
✗ Are risk-averse or depend on regular income from investments
✗ Have not yet built a solid mutual fund or equity portfolio as a foundation
✗ Are unfamiliar with alternative asset classes and their risk characteristics
✗ Are investing based on short-term return expectations (1–2 years)

OUR PROCESS

How Aasaan Nivesh Helps You Invest in an AIF

From understanding your eligibility to post-investment reporting — we handle everything, powered by Centricity’s AIF distribution platform.

1

Eligibility & Suitability Check

We assess your net worth, investable surplus, risk appetite, and investment horizon to confirm if AIF is the right vehicle for you.

4

KYC & Documentation

We complete all SEBI-mandated KYC requirements and documentation. Accredited investor certification, if required, is also facilitated.

2

Category & Fund Selection

We help you choose the right AIF category (I, II, or III) and curate 2–3 specific fund options from Centricity’s network that match your profile.

5

Commitment & Capital Call

After the subscription agreement is signed, capital is called by the fund as per their deployment schedule — typically in tranches.

3

Placement Memorandum Review

We walk you through the fund’s placement memorandum, fee structure, hurdle rate, profit sharing, and lock-in — so there are zero surprises.

6

Reporting & Advisory

We help you interpret quarterly NAV reports, distributions, and Form 64B for tax filing — and advise on portfolio rebalancing as your wealth grows.

TAX IMPLICATIONS

AIF Taxation — Simplified

AIF taxation varies significantly by category and income type. Here’s a plain-English summary for FY 2025–26 — but always consult your CA for your specific situation.

Category I AIF

Venture Capital & Social Funds

→ Pass-through structure — income is NOT taxed at the fund level
→ Capital gains, dividends, and interest are taxed in the investor’s hands
→ From FY26: Securities held by Cat I AIFs treated as capital assets
→ LTCG at 12.5% (if held 24 months+); STCG at applicable slab
💡 Cat I AIFs file Form 64B/64C — investors receive their share of income/gain for filing.
Category II AIF

Private Equity & Credit Funds

→ Pass-through structure — income NOT taxed at fund level
→ Capital gains explicitly classified from FY26 (Finance Act 2025)
→ LTCG: 12.5% on gains; STCG: at slab rate
→ For NRIs: taxed at rates in force, subject to treaty benefits
💡 This is the most tax-efficient AIF category for most HNI investors seeking long-term capital gains treatment.
Category III AIF

Hedge & Complex Strategy Funds

→ No pass-through — income IS taxed at the fund level
→ Business income taxed at Maximum Marginal Rate (~42.74%)
→ July 2025 Delhi HC ruling introduced important clarifications
→ GIFT City domiciled Cat III AIFs may enjoy tax exemptions
⚠️ Cat III is more complex from a tax perspective. We strongly recommend consulting a CA with AIF experience.

OUR DISTRIBUTION PARTNER

Powered by Centricity — India's Premium PMS & AIF Platform

Aasaan Nivesh is an authorised distribution partner for Centricity, giving our clients access to a curated selection of India’s leading AIF managers — across all three categories — with institutional-grade due diligence already done.

✓ Access to Cat I, II & III funds across multiple fund houses
✓ Centricity’s fund selection process filters for track record, governance, and risk management
✓ Quarterly NAV and fund performance reporting
✓ Tax documentation (Form 64B / 64C) facilitated
✓ Co-investment opportunities for accredited investors
✓ NRI-eligible fund structures available

WHAT AASAAN NIVESH BRINGS TO YOUR AIF JOURNEY

🤝
Personal AdvisoryAkash Jain personally reviews your AIF suitability before any recommendation
📋
Placement Memorandum GuidanceWe simplify the legal document so you know exactly what you’re signing
🔗
Portfolio IntegrationAIF allocation is integrated with your overall portfolio across MF, PMS, and insurance
📊
Bi-Annual ReviewAIF performance reviewed alongside your full portfolio at every bi-annual review
📞
Dedicated AccessDirect line to Akash Jain — not a relationship manager who changes every year

COMMON QUESTIONS

AIF FAQs — Answered Plainly

Everything sophisticated investors ask before committing to an AIF.

A PMS (Portfolio Management Service) directly manages a portfolio of listed equities in your name with a minimum of ₹50 lakh. An AIF is a pooled fund structure that invests in a broader range of assets — private equity, unlisted companies, structured credit, or hedge strategies — with a minimum of ₹1 crore. AIFs offer access to asset classes completely unavailable through PMS or mutual funds, and are suited for investors looking to go beyond listed markets.
Generally, no. Category I and II AIFs are close-ended with a defined tenure (typically 3–10 years). Early redemption is not permitted in most cases, though some funds allow secondary transfers to other eligible investors. Category III AIFs may be open-ended and allow periodic redemptions. It is critical to ensure that capital committed to an AIF is genuinely surplus — you must not need it for other purposes during the lock-in period.
A hurdle rate is the minimum return that the fund must deliver before the fund manager earns any performance fee. For example, if the hurdle rate is 8% and the fund delivers 15%, the manager earns a share of the 7% excess — this share is called “carried interest” or “carry,” typically 10–20% of gains above the hurdle. This structure ensures the fund manager’s incentives are aligned with yours.
Yes. NRIs and foreign nationals can invest in AIFs subject to RBI and FEMA guidelines. Most Category I and II AIFs are open to NRI investors via the NRO or NRE route. We at Aasaan Nivesh have experience facilitating AIF investments for NRI clients from the UAE, USA, UK, Singapore, and Australia — entirely remotely in most cases.
Not necessarily. Many AIFs (particularly private equity and credit funds) operate on a “capital call” or “drawdown” model. You commit ₹1 crore but the fund calls capital in tranches as it finds and closes investments — which may happen over 12–24 months. This means your cash is not all deployed immediately and can earn returns in a liquid instrument while awaiting deployment.
Typically: PAN card, Aadhaar, cancelled cheque, bank statement (last 6 months), net worth certificate or CA-certified statement confirming investable surplus, and a completed KYC form. For NRIs: passport, OCI/PIO card, overseas address proof, and NRO/NRE account details.
No separate fee is charged to you as the investor. As an authorised distribution partner for Centricity, Aasaan Nivesh earns a distribution commission from the fund house — this is disclosed in the placement memorandum. The fund’s total fee structure (management fee + carry) is shown transparently before you invest.

Ready to Go Beyond
the Ordinary Portfolio?

Speak with Akash Jain for a no-obligation AIF suitability assessment. We’ll tell you honestly whether an AIF belongs in your portfolio — and if so, which one.

📞 Call: 7678193636
💬 WhatsApp Us

Free advisory call · No commitment · Delhi & Noida offices · NRI clients welcome · Powered by Centricity