If you’ve already explored mutual funds or tried your hand at direct equity, and you’re now looking to take your investment journey to the next level — it’s time to get acquainted with AIFs.
In this guide brought to you by Maloo Investwise — one of India’s leading mutual fund distributors — we’ll help you understand what Alternative Investment Funds (AIFs) are, why they’re becoming increasingly popular, and how you can confidently invest in some of the top AIFs in India.
What is an AIF (Alternative Investment Fund)?
An Alternative Investment Fund is a privately pooled investment vehicle that puts money into non-traditional assets. Unlike mutual funds that invest in stocks and bonds, AIFs explore private equity, real estate, hedge funds, venture capital, debt, and more.
These funds are regulated by SEBI under the AIF Regulations, 2012, offering structure, transparency, and legality to sophisticated investors — particularly HNIs (High Net Worth Individuals).
Types of AIFs in India
AIFs are broadly classified into three categories, each with a distinct purpose and strategy:
Category I AIFs
Invest in:
- Start-ups
- Social ventures
- Infrastructure
- SMEs
Objective: Promote economic growth and innovation.
Category II AIFs
Invest in:
- Private equity
- Debt funds
- Fund of funds
Objective: Long-term capital appreciation.
Category III AIFs
Use strategies like:
- Derivatives
- Leverage
- Arbitrage
Objective: Achieve short-term gains and absolute returns.
AIF vs Mutual Funds – What’s the Difference?
Feature | AIF | Mutual Fund |
Regulator | SEBI (AIF Regulations) | SEBI (Mutual Fund Regulations) |
Investor Profile | HNIs, Institutions | Retail Investors |
Minimum Investment | ₹1 Crore | As low as ₹500 |
Strategy | Tailor-made, complex | Standardized |
Liquidity | Lock-in Period | Highly Liquid |
Returns | Potentially higher (with risk) | Moderate, market-linked |
Why Are AIFs Gaining Traction?
✅ Wider diversification beyond traditional markets
✅ Access to private markets often closed to retail investors
✅ Customized strategies tailored for higher returns
✅ Managed by experts with deep market insights
✅ Lower correlation with general market volatility
Who Should Consider Investing in AIFs?
- High Net Worth Individuals (HNIs)
- Investors with a higher risk appetite
- Long-term wealth builders
- Family offices and institutional investors
- Anyone looking to diversify significantly beyond mutual funds
📌 Note: The minimum investment for AIFs is ₹1 crore.
Top AIFs in India to Watch
Here are some well-known players in the Indian AIF space:
- ICICI Prudential AIF
- Kotak Investment Advisors
- Edelweiss Alternative Asset Advisors
- Motilal Oswal AIF
- ASK Group
- IIFL Wealth & Asset Management
Each fund brings a different strength to the table — whether it’s real estate, venture capital, debt, or equity strategies. At Maloo Investwise, we guide you to the one that fits your financial profile best.
How to Start Investing in AIFs
Investing in AIFs is a structured process, and you’ll need to go through a certified intermediary like Maloo Investwise:
- Consult with a Registered Distributor
Ensure the advisor is SEBI-registered. - Understand the AIF Scheme
Go through the documents — including investment strategy, lock-in period, and associated risks. - Complete KYC & Onboarding
Submit PAN, address proof, income documents, and net worth declaration. - Access Your AIF Portal
Monitor investments, reports, and performance metrics. - Regular Performance Reviews
Get help from our experts to interpret quarterly/half-yearly reports and re-strategize as needed.
Risks to Keep in Mind
While AIFs offer the potential for high returns, they are not without risks:
- Market volatility
- Longer lock-in periods (3–7 years)
- Limited liquidity
- Exit and performance-based fees
👉 At Maloo Investwise, we work with you to understand and manage these risks smartly.
AIF vs PMS – What’s the Difference?
Though often confused, AIFs and PMS (Portfolio Management Services) have different structures and purposes:
Feature | AIF | PMS |
Regulation | SEBI (AIF Regulations) | SEBI (PMS Regulations) |
Structure | Pooled Fund | Individual Portfolio |
Investment Focus | PE, VC, Debt, Real Estate | Equity-centric |
Customization | Limited | High |
Reporting | Fund-wide | Personalized |
Why Choose Maloo Investwise for Your AIF Journey?
At Maloo Investwise, we don’t just recommend products — we offer tailored investment strategies backed by experience and analysis.
- 🎯 Carefully curated AIFs
- 🧠 Strategy planning by experts
- 📊 Risk assessment & performance analysis
- 🤝 Personal guidance at every stage
We make alternative investing simple, strategic, and transparent.
Conclusion
AIFs represent a new-age investing opportunity for those ready to step beyond the basics and explore high-growth, high-potential sectors. If you have the capital, the patience, and the vision, AIFs can offer rewarding diversification.
Need help navigating the AIF landscape? Let the experts at Maloo Investwise assist you in making informed, confident, and profitable investment decisions.
Disclaimer
Investing in AIFs involves risk and is subject to market conditions and regulatory frameworks. Past performance is not indicative of future results. This blog is for educational purposes only and does not constitute financial advice. Always consult a SEBI-registered advisor like Maloo Investwise before investing.