What is an AIF?
An AIF is a fund established in India that pools money privately from investors and invests it according to a defined policy under the SEBI (Alternative Investment Funds) Regulations, 2012. Unlike a mutual fund, an AIF is not a retail product: the minimum commitment is ₹1 crore, schemes are offered by private placement, and liquidity is limited — many funds run 5–8 year terms or have lock-ins.
The three categories
| Category | What it invests in | Typical examples |
|---|---|---|
| Category I | Start-ups, SMEs, infrastructure and other areas considered economically desirable | Venture capital funds, angel funds, infrastructure funds |
| Category II | Funds that use no leverage beyond operational needs | Private equity, private credit / debt funds, real-estate funds |
| Category III | Complex or diverse trading strategies, may use leverage | Long-short equity funds, hedge-fund-style strategies |
AIF vs PMS vs mutual funds
| Mutual fund | PMS | AIF | |
|---|---|---|---|
| Minimum | ₹100–500 (SIP) | ₹50 lakh | ₹1 crore |
| Ownership | Units of a pooled scheme | Securities in your own demat | Units of a private pooled fund |
| Liquidity | Daily (open-ended) | Days to exit | Limited; multi-year terms common |
| Suited for | Every investor | HNIs wanting a personal portfolio | Sophisticated investors seeking private-market strategies |
Deeper reading: PMS vs AIF explained · What is an AIF? Categories I, II, III explained · How to choose a wealth management company in Delhi.
How PCJ helps you access AIFs
PCJ Holdings has served investors from Connaught Place, New Delhi for over 25 years as a SEBI-registered stock broker (NSE, BSE, MCX), NSDL depository participant and AMFI-registered mutual fund distributor (ARN-63632). For AIFs, our Private Wealth Desk helps you shortlist SEBI-registered funds whose strategy matches your goals, walks you through the private placement memorandum, handles commitment and KYC paperwork, and tracks the investment alongside the rest of your portfolio — one Relationship Manager for the family. We serve clients across India — in person in Delhi NCR and fully digitally everywhere else.
What to check before committing to any AIF
- SEBI registration of the fund and the track record of the investment manager
- Strategy, concentration and use of leverage (especially Category III)
- Fees: management fee, hurdle rate, performance fee (carry) and expenses
- Tenure, lock-in and exit terms — commit only money you will not need soon
- Taxation for the category — Category I and II are generally pass-through on most income, Category III is typically taxed at the fund level; confirm with your tax adviser
Frequently Asked Questions
SEBI requires a minimum investment of Rs 1 crore per investor in an Alternative Investment Fund (Rs 25 lakh for employees or directors of the AIF manager).
Category I invests in early-stage or economically desirable areas such as venture capital and infrastructure. Category II covers private equity and private credit funds without leverage beyond operational needs. Category III uses complex strategies, including long-short, and may use leverage.
Yes. Every AIF must be registered with SEBI under the SEBI (Alternative Investment Funds) Regulations, 2012, and each scheme issues a private placement memorandum describing its strategy, fees and risks.
AIFs are privately pooled vehicles for sophisticated investors with a Rs 1 crore minimum, limited liquidity and wide strategy freedom; mutual funds are retail products with small minimums, daily NAV and daily liquidity in open-ended schemes.
Yes. PCJ Holdings distributes AIFs of SEBI-registered managers: we help you compare strategies, complete documentation and track the investment, wherever in India you are based. We are distributors, not the fund manager.
No. AIF investments are subject to market and strategy risk, often with multi-year lock-ins. Read the private placement memorandum carefully before investing.
Considering an AIF for your portfolio?
A 20-minute conversation with the Wealth Desk will tell you whether an AIF, a PMS or simple mutual funds fit your goal. No obligation.
WhatsApp usPCJ Holdings Pvt. Ltd. distributes third-party products (mutual funds, PMS, AIF) of SEBI-registered manufacturers and does not itself provide investment advice or portfolio management. Investments are subject to market risks; read all scheme and fund documents carefully. AIFs involve limited liquidity and are suitable only for investors who meet SEBI eligibility norms.