New Delhi: Securities Exchange Board of India (SEBI) has allowed as many as 123 entities to set up Alternative Investment Funds (AIFs) – which consist of pooled-in investment for real estate, private equity and hedge funds – in less than two-and-half years.
The 123 AIFs have already been registered with the Securities and Exchange Board of India (SEBI) since July 2012. Of these, around 34 entities have got the market regulator’s approval to operate so far this year (January-November), 67 in 2013 and the remaining 22 in 2011.
The Category-I AIFs are those funds that get incentives from the government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds. The Category-III, AIFs are those trading with a view to making short-term returns and it includes hedge funds, among others.
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 funds, debt funds or fund of funds, as also all others falling outside the ambit of above two other categories.