AIF investments rise 30% to `18,237 cr in fourth quarter

They made investments to the tune of Rs 18,237 crore in three months ended March 31, 2016, higher than Rs 14,031 crore infused in October-December quarter, according to latest data available with Sebi. The Category I AIFs poured in Rs 2,828 crore, Category II Rs 11,502 crore and Category III Rs 3,907 crore.

The regulator had notified in May 2012, the guidelines for this class of market intermediaries. Since then, they have been making investment. At the end of December 2012, they pumped in just Rs 20 lakh which has now jumped to more than Rs 18,000 crore. More than 200 AIFs have been registered with Securities and Exchange Board of India (Sebi) since 2012. AIFs are funds established or incorporated in India for the purpose of pooling in capital from Indian and foreign investors for investing as per a pre-decided policy. 

Under Sebi guidelines, AIFs can operate broadly in three categories. The Category-I AIFs are those funds that get incentives from the government, Sebi or other regulators and include social venture funds, infrastructure funds, venture capital funds and SME funds. The Category-III AIFs are those trading with a view to making short-term returns and includes hedge funds, among others.

The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include private equity funds, debt funds or fund of funds, as also all others falling outside the ambit of above two other categories.

Pitching for drastic changes in norms governing venture capital and private equity funds, a Sebi panel, earlier this year, suggested favourable tax regime and measures to attract long-term funds from domestic and overseas investors.