AIF – Cat II & Cat III
Alternative Investment Funds (AIF) – Category II & Category III are investment vehicles designed for sophisticated investors seeking strategies beyond traditional equity and debt markets.
Category II AIFs include private equity funds, debt funds, and fund-of-funds that invest in unlisted companies or structured instruments, aiming for long-term capital appreciation without using leverage.
Category III AIFs employ complex and diverse trading strategies, including the use of leverage and derivatives, to generate absolute returns across different market conditions. These AIFs provide access to specialized investment approaches and opportunities not typically available through conventional investment products.
Types of AIF – Cat II & Cat III
Potential for Higher Returns
Exposure to alternative strategies and assets can generate superior risk-adjusted returns.
Portfolio Diversification
Reduces concentration risk by spreading investments across multiple assets.
Potential Returns
Structured funds can generate growth over medium to long-term horizons.
Market Participation
Enables exploration of structured investment strategies with defined risk frameworks.
Why Invest in AIF – Cat II & Cat III
Advanced Investment Strategies
These AIFs use specialized strategies such as private equity, structured credit, long–short positions, and arbitrage to enhance returns.
Access to Non-Traditional Assets
Investments may include unlisted equities, private debt, derivatives, and other alternative instruments not available in mutual funds.
Professional Fund Management
Managed by experienced fund managers with expertise in complex markets and investment techniques.
Regulated Framework
Governed by SEBI regulations, ensuring transparency, disclosures, and investor protection.
Flexible Portfolio Construction
Category II follows defined investment mandates, while Category III allows dynamic allocation and use of leverage.
