Markets regulator Sebi has allowed 158 entities to set up AIFs – newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds – in about three years.
The 158 Alternative Investment Funds (AIFs) have been registered with the Securities and Exchange Board of India (Sebi) since August 2012. Of this, 33 AIFs got capital markets regulator’s approval in the first six months of 2015 to operate in the country, 37 secured Sebi’s nod last year, 67 in 2013 and the remaining 21 in 2012.
Among the newly registered AIFs are HDFC Capital Affordable Real Estate Fund, Unicorn India Ventures Trust, Arthveda Affordable Housing Trust and Blume Ventures India Fund.
AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy. Under Sebi guidelines, AIFs can operate broadly in three categories.
The Sebi rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds among others.
During the April-June quarter, AIFs have made an investment of Rs 9,094.55 crore, higher than Rs 7,357 crore invested in the preceding three months. The regulator had notified in May 2012, the guidelines or this class of market intermediaries.
The Category-I AIFs are those funds that get incentives from the government, Sebi or other regulators and include social venture funds, infrastructure Funds, venture capital funds and SME funds.
The Category-III AIFs are those trading with a view to making short-term returns and includes hedge funds among others. The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements.
These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of above two other categories.