What is an AIF? Alternative Investment Funds in India, explained
What is an AIF?
An Alternative Investment Fund is a privately pooled investment vehicle registered with SEBI that collects money from investors to invest under a stated policy. The minimum investment is Rs 1 crore. AIFs cover venture capital, private equity, private credit and hedge-style strategies, and are regulated under the SEBI (Alternative Investment Funds) Regulations, 2012.
The definition
An Alternative Investment Fund is a privately pooled investment vehicle registered with SEBI. It collects money from investors — Indian or foreign — and invests it according to a policy stated in advance.
"Privately pooled" is doing the work in that sentence. An AIF is not offered to the public. It is placed with a limited set of investors, capped at 1,000 per scheme, and that cap is what keeps it a private placement rather than a public offer.
The governing instrument is the
SEBI (Alternative Investment Funds) Regulations, 2012.
A fund must register before it raises money, and registration produces a number
of the form IN/AIF{1,2,3}/{financial year}/{serial}.
The three categories, one line each
- Category I — funds in areas the state considers desirable: venture capital, angel funds, SME, social impact, infrastructure, special situation funds. Close-ended, no leverage.
- Category II — everything that is neither I nor III and uses no leverage beyond day-to-day needs. Private equity and private credit live here, and this is by far the largest category by commitments raised.
- Category III — diverse or complex trading strategies, and the only category permitted to use leverage. May be open-ended.
Current fund counts and the size of each category are on the SEBI quarterly data page, which carries SEBI's own figures with the quarter they refer to.
Who can invest, and how much
The minimum investment is ₹1 crore. Employees and directors of the fund, and employees and directors of its manager, may invest ₹25 lakh, on the reasoning that they are insiders rather than distributed investors.
A large value fund requires ₹25 crore per investor, and every investor in one must be accredited. SEBI cut that threshold from ₹70 crore on 18 November 2025 — see Accredited Investors Only AIFs.
How an AIF differs from a mutual fund
| AIF | Mutual fund | |
|---|---|---|
| Offering | Private placement | Public |
| Minimum | ₹1 crore | A few hundred rupees |
| Investors per scheme | Capped at 1,000 | Unlimited |
| Liquidity | Category I and II close-ended | Daily, in open-ended schemes |
| Holdings | Freely unlisted | Mainly listed |
| Published NAV | No | Daily |
| Performance comparable | No | Yes |
The last row is the one that surprises people. Mutual fund performance is published daily and portfolio management performance monthly, but AIF performance is not published fund by fund. It sits in the private placement memorandum and in reports to existing investors, and no official source publishes comparable per-fund returns, NAV or IRR.
That is why this site publishes registration facts, structure and SEBI's own industry statistics, and publishes no per-fund returns. If you have found a ranked table of Indian AIF returns somewhere, it was built from self-reported numbers nobody is obliged to publish, standardise or verify.
For the closest comparison, see AIF vs PMS.
Not to be confused with
"AIF" is one of the most heavily overloaded three-letter terms in Indian search, and most of the volume has nothing to do with investing. In India the single largest meaning is not this one. If you arrived here looking for any of these, this is not it:
- Agriculture Infrastructure Fund — a ₹1 lakh crore central sector financing facility for post-harvest and farm-gate infrastructure, with 3% interest subvention on loans up to ₹2 crore. Applications go through the National Agriculture Infra Financing Facility portal. This is the most-searched AIF in India and it has nothing to do with SEBI.
- Mjällby AIF — a Swedish football club. Allmänna Idrottsföreningen.
- SAP AIF — SAP Application Interface Framework, an integration monitoring tool.
- American India Foundation — a US non-profit working on development programmes in India.
- AIFF — the All India Football Federation.
- AIF (.aif / .aiff) — Audio Interchange File Format, an uncompressed audio container.
- AIF in banking — occasionally used for internal audit or asset-related frameworks, unrelated to SEBI's fund regime.
- AIF Capital, AIF Global — private equity and advisory firms outside India that carry the initials in their own names. Neither is a SEBI-registered AIF.
On this site, AIF means an Alternative Investment Fund registered with SEBI under the Alternative Investment Funds Regulations, 2012, and nothing else.
AIF in finance — what the term means when a bank or a wealth manager uses it
When the word appears in an Indian financial context — a private banker's deck, a wealth platform, a relationship manager's pitch — it means exactly one thing: a privately pooled investment vehicle registered with SEBI under the SEBI (Alternative Investment Funds) Regulations, 2012, collecting money from investors to invest under a stated policy, with a ₹1 crore minimum.
It is not a product a bank manufactures, and it is not a category of bank deposit. The bank or wealth manager is a distributor. The fund is a separate SEBI-registered entity with its own registration number, sponsor, manager and trustee — all of which you can look up on SEBI's public register of Alternative Investment Funds, and all of which this site reproduces in the directory.
If a house is named in the pitch, start there. ICICI, Kotak, Edelweiss, Aditya Birla, InCred, Marcellus and the rest each have several registered funds under different entities, and the entity on the contribution agreement is the one that matters. Every manager page lists the funds SEBI records against that house.
Where to go next
- The three AIF categories, explained
- AIF vs PMS and AIF vs SIF
- What an AIF costs
- What can go wrong
- SEBI's GARUDA mechanism, the July 2026 change to how a scheme launches
Browse every registered fund in the directory, read the regulation, or look up a term in the glossary. The underlying source is SEBI's public register of Alternative Investment Funds.
Checked against source on 24 August 2026. This page is information, not legal, tax or investment advice.