RBI to allow India's AIFs to invest overseas
The Reserve Bank of India (RBI) has said it will allow alternative investment funds (AIFs), to invest overseas.
The decision - which was announced on the central bank's website - now means that India-based AIFs registered with the Securities and Exchange Board of India (SEBI) can now adopt a regional or a global strategy without the need to set up any kind of special purpose vehicle.
The change is expected to make is easier for Indian GPs to diversify their portfolios.
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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