Three months after market regulator SEBI notified its norms for regulating various investment firms, such as private equity, venture capital and hedge funds, seven funds have registered themselves as alternative investment funds (AIF).
According to SEBI, seven funds have registered as AIFs as of August 16, 2012. Of these, three have been registered as category I AIF (one is an infrastructure fund while the other two are venture capital funds), three as category II AIF and one has come in for category III.
As per AIF norms, there are three categories of funds for the purpose of regulations – AIF I (VC/SME funds, social venture funds and infrastructure funds), AIF II (PE funds, debt funds, fund of funds) and AIF III (hedge funds).
The seven funds who have registered as AIFs include IFCI Sycamore India Infrastructure Fund, Utthishta Yekum Fund, Indiaquotient Investment Trust, Forefront Alternate Investment Trust, Excedo Realty Fund, Sabre Partners Trust and KKR India Alternate Credit Opportunities Fund I.
There is not much clarity on the nature of KKR’s fund as to whether it has been carved out as the maiden India-focused investment fund by the buyout giant, which has been investing in the country out of its Asian fund. KKR, which has recently announced its maiden entry into global retail asset management business by floating two mutual funds that will invest in credit products, has registered its fund under category II AIF in the country, which means it would be either a private equity fund or a debt fund or a fund of fund. The name of the registered entity does seem to indicate that it could be a debt fund.
When contacted by VCCircle, a KKR spokesperson said this is just a license and an enabler for the firm, adding that there is no India fundraising exercise on the cards.
KKR operates in the public markets globally through two entities including KKR Asset Management, and one of its product offering revolves around alternative credit strategies, such as mezzanine investments, special situations investments and direct senior lending.
Among the other funds who have registered as AIFs, IFCI and Sycamore had teamed up last year to raise an India-focused infra fund under IFCI Sycamore; India Quotient is a new early-stage investment fund formed only two months ago; Excedo is a realty fund managed by Athamus Venture and Forefront comes in as a hedge fund.
In an unrelated development for the AIFs in India, SEBI, in a board meeting held yesterday, relaxed the norms for minimum promoter holding of 20 per cent for a primary issue or IPO. The market regulator will now allow such promoters to offload up to 10 per cent of that 20 per cent to an AIF to go ahead with the public issue. However, this relaxation is only for SEBI-registered AIFs and private equity firms who come in as pre-IPO investors but who have not registered as AIFs, would not be counted in this window.
(Edited by Sanghamitra Mandal)