KKR fund among AIFs to operate in India under new route
KKR’s India Alternate Credit Opportunities Fund is among seven alternative investment funds (AIFs) that have been approved by the Securities and Exchange Board of India (SEBI).
The other six entities permitted to operate under the newly formulated AIF route - which allows pooling of funds from Indian and foreign LPs for investments in areas such as real estate, private equity and hedge funds - are IFCI Syncamore India Infrastructure Fund, Utthishta Yekum Fund, Indiaquotient Investment Trust, Forefront Alternate Investment Trust, Excedo Realty Fund and Sabre Partners Trust.
New rules to govern such funds were announced back in April, replacing the venture capital funds (VCF) system, which was seen as unwieldy - because classification requirements were so broad - and unsafe because there was no mandatory registration.
There are three categories of AIF. The first category is for "AIFs with positive spillover effects on the economy, for which certain incentives or concessions might be considered." They include venture capital funds, SME funds, social venture funds and infrastructure funds.
Category two is for vehicles that don't qualify for incentives or concessions: private equity funds, debt funds, fund-of-funds and anything else that doesn't fall under category one or category three.
The third category is designed for vehicles that embrace high risk or complex trading strategies, i.e. hedge funds.
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