Sebi registers over 200 Alternative Investment Funds

Markets regulator Sebi has allowed as many as 209 entities to set Alternative Investment Funds, pooled-in investment vehicles for real estate, private equity and hedge funds, over a period of 42 months.

The 209 Alternative Investment Funds (AIFs) have been registered with Sebi since August 12.

Among the newly registered AIFs are Kotak India Real Estate Fund, Ideaspring Capital Fund, IDFC Private Equity Fund and Canara Bank Venture Development Trust.

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.

The Securities and Exchange Board of India (Sebi) rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds among others.

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The regulator had notified in May 2012, the guidelines or this class of market intermediaries.

Under Sebi guidelines, AIFs can operate broadly in three categories.

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.

Category-II: AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements.

Category-III: AIFs are those trading with a view to making short-term returns and includes hedge funds among others.

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.