Alternative investment funds or AIF cover investments that do not happen through the traditional forms like stocks, bonds, securities, property and cash, among others. Alternative investments examples are hedge funds, commodities, financial derivatives, venture, antique coins, stamps, and paintings.
It is noted that most of the AIF investment advisors raise capital from the high-net worth investors, but there is no cap and institutional investors can also invest in it. Define Alternative Investment Funds Alternative Investment Fund generally refers to a private fund that isn’t available through IPOs or Initial Public Offerings and other types of the public issue, which are valid under the Mutual Funds & Collective Investment Schemes registered with SEBI (Securities and Exchange Board of India). They mostly deal in funds such as private equity, hedge funds, real estate, pooled from foreign or Indian investors, according to the defined investment policy for the investor’s benefits. Such funds don’t include funds registered with SEBI Regulations, 1996 and 1999 to regulate any fund management movements. Investing in Alternative Investment Funds Investments in AIF funds are open to Indian and even foreign investors. It is important to note that the majority of the alternative investment funds seek capital from the high-net worth investors as per the scheme guidelines. Let us check out a few other conditions: · AIF won’t accept any investment value that is below INR 1 crore · This fund won’t collect funds other than private placement · Every alternative investment fund scheme must have the corpus of INR 20 crores at least · Under any scheme there must not be 1000 or more investors · The AIF Investment Advisors should contribute 2.5 % in an initial capital investment Are you looking to invest in the alternative investment funds? No matter whether it is AIF or any financial asset, it is very important that investors know the pros & cons of investing in any fund and the same applies to alternative investment. It is always good to take help of the best AIF Company in India. As these funds do not generally correlate to the stock markets and give you higher diversification and help investors to mitigate volatility. But, return rates from AIF’s aren’t guaranteed, although they have a potential of delivering great returns compared to the traditional investments. But, there are certain fees linked with such types of funds and that are a bit on a higher side. Also, since they have a potential of delivering very high returns, risks with them are also very high. So, it is very important that you go through the terms document carefully and then make the right decision. The final thoughts Before you invest in the alternative investment fund, it is important to go through the fund structure, goals and any associated risk. Make sure you proceed only after you have completely understood every detail about the fund and asset that you are looking to invest in. You can always consult the best AIF Company in India or visit PMS AIF World website, if required.
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January 2021
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