Alternative Investment Funds (AIFs) are professionally managed pooled investment vehicles that invest in specialized and sophisticated opportunities beyond traditional equity and debt. AIFs are regulated by SEBI and are designed for HNI and Ultra-HNI investors who want exposure to high-quality, high-growth, or alternative asset classes.

AIFs require a minimum investment of ₹1 crore and follow advanced strategies to generate superior risk-adjusted returns. These funds are structured, managed, and monitored by institutional portfolio managers with deep sector expertise.

Categories of AIF:

• Category I - Invest in early-stage companies, startups, SMEs, infrastructure, and socially beneficial sectors.
• Category II - Use complex or debt-oriented strategies like private equity, private credit, distressed assets, and real estate funds.
• Category III - Use long-short, arbitrage, derivative-based, or high-frequency trading strategies for aggressive returns.

AIFs involve higher risk, longer lock-in periods, and higher fees, but offer access to unique opportunities unavailable through mutual funds or PMS. They are suitable for investors seeking diversification, alternative asset exposure, and professional high-conviction strategies.