Indian regulator receives 20 applications for AIF approval
The Securities and Exchange Board of India (SEBI) has received 20 applications from fund managers for Alternative Investment Fund (AIF) status, the new regulatory classification designed to improve oversight of private equity, real estate and hedge fund investors.
Of the pending applications, 15 are being processed, including India Advantage Fund, India Realty Fund, Kedaara Capital, HDFC AMC Real Estate and DSP BlackRock, The Economic Times reported. The remaining five - IIFL Private Equity Fund, L&T Ingra Investment Partners and CapAleph Indian Millennium Fund among them - had submitted incomplete information as of August 31. They have been asked to provide further details.
AIF status has already been awarded to seven entities, including IFCI Syncamore India Infrastructure Fund, Excedo Realty Fund, Sabre Partners Trust and KKR India Alternate Credit Opportunities Fund.
The AIF system was introduced to replace venture capital funds, which were seen as unwieldy because classification requirements are so broad and unsafe because there is no mandatory registration.
There are three categories of AIF: vehicles that have a positive spillover effect on the economy and might qualify for certain incentives, such as venture capital funds, social venture funds and infrastructure funds; vehicles that don't qualify for incentives, such as private equity funds, debt funds and fund-of-funds; and vehicles that embrace high risk or complex trading strategies, such as hedge funds.
In each category, there are minimum fund sizes, limits on the total number of investors, strict reporting requirements, caps on individual investments as a proportion of total fund size, and restrictions on capital-raising via the public markets.
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