The capital put in by alternative investment funds (AIFs) has risen to nearly Rs 75,000 crore at the end of April-June quarter of the current fiscal, a surge of 90 per cent from the year-ago period. AIFs are a class of pooled-in vehicles for investing in real estate, private equity and hedge funds and over 270 such funds are registered with the Securities and Exchange Board of India (Sebi) since 2012. The investment made by AIFs stood at Rs 74,893 crore during the three months ended June 2018, much higher than Rs 39,308 crore invested in the same quarter last year, according to latest data available with Sebi. At the end of March quarter, capital infused by AIFs was at Rs 61,400 crore.
The category I AIFs poured in Rs 8,955 crore, category II Rs 41,710 crore and category III Rs 24,228 crore. The regulator, in May 2012, notified the guidelines for this class of market intermediaries. At the end of December 2012, they pumped in just Rs 20 lakh, which has now jumped to close to Rs 75,000 crore. 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. Under the Sebi guidelines, AIFs can operate broadly in three categories.
The category-I AIFs are those funds that get incentives from the government and regulators and include social venture, infrastructure and venture capital funds. The category-III AIFs are those trading with a view to making short-term returns and include hedge funds. The category-II AIFs can invest anywhere in any combination, but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include private equity and debt funds or fund of funds.