NBFC Advisor

Thinking of Starting an Alternative Investment Fund (AIF)? Here’s What You Should Know

  • 26-Oct-2025
ENQUIRE NOW

Thinking of Starting an Alternative Investment Fund (AIF)? Here’s What You Should Know

India’s financial landscape is rapidly evolving, and Alternative Investment Funds (AIFs) have emerged as one of the most attractive investment vehicles for high-net-worth individuals (HNIs) and institutional investors. These funds provide flexibility, diversification, and access to unique asset classes beyond traditional equity and debt instruments.

However, before launching your AIF, it’s important to understand the regulatory framework laid out by the Securities and Exchange Board of India (SEBI). Here’s a quick guide to help you get started:

Key SEBI Regulations for Setting Up an AIF

  1. Fund Structure
    Your AIF must be registered as a Trust, Company, or Limited Liability Partnership (LLP). The structure you choose impacts your governance, compliance, and tax strategy.

  2. Minimum Fund Size

    • For most AIFs: ₹20 crore

    • For Angel Funds (a sub-category under Category I AIFs): ₹5 crore

  3. Fundraising Rules
    AIFs can raise funds only through private placement—that means no public advertisements or solicitations are allowed.

  4. Sponsor Contribution
    The sponsor must contribute at least 2.5% of the corpus or ₹5 crore, whichever is lower. This ensures that sponsors have a vested interest in the fund’s success.

  5. Investor Limit
    Each AIF scheme can have a maximum of 1,000 investors. This helps maintain exclusivity and regulatory oversight.

  6. Professional Expertise
    At least one key personnel of the AIF management team must have prior experience in finance, investment, or fund management.

 Why Compliance Matters

SEBI’s framework ensures transparency, investor protection, and sound fund governance. Failing to comply with these guidelines can delay registration or even lead to penalties, so expert assistance is crucial.

 How We Help

At NBFC Advisor, we specialize in helping businesses and fund managers set up and register their AIFs with SEBI, ensuring full regulatory compliance and smooth documentation.

From structuring the fund and drafting documents to liaising with SEBI and final registration, our experts handle the process end-to-end.

Get Expert Guidance

Thinking of launching your own AIF? Let’s make it simple and compliant.
Contact us today for a free consultation!
📞 +91 93113 47006

#NBFCAdvisor #AIF #SEBI #InvestmentFunds #PrivateEquity #NBFC #VentureCapital #WealthManagement

thinking sound fund governance investor protection framework ensures transparency compliance matterssebi’ fund management investment finance prior experience aif management team key personnel professional expertiseat failing regulatory oversight 000 investors maximum investor limiteach aif scheme success fund’ vested interest sponsors ensures lower whichever ₹5 crore helps maintain exclusivity comply guidelines delay registration today contact compliant simple make expert guidancethinking -end process end- experts handle final registration liaising drafting documents fund structuring smooth documentation ensuring full regulatory compliance register fund managers set helping businesses specialize helpat nbfc advisor crucial expert assistance penalties lead corpus 5% contribute sponsor contributionthe sponsor securities regulatory framework laid understand important launching debt instruments traditional equity unique asset classes access diversification funds provide flexibility institutional investors hnis high-net-worth individuals attractive investment vehicles emerged aifs alternative investment funds rapidly evolving financial landscape knowindia’ ’ aif alternative investment fund starting exchange board free consultation india quick guide allowed solicitations public advertisements means private placement— raise funds ₹5 crorefundraising rulesaifs category -category ₹20 crorefor angel funds minimum fund sizefor tax strategy compliance governance choose impacts structure llp limited liability partnership company trust registered aiffund structureyour aif setting key sebi regulations started sebi 📞 +91 93113 47006#nbfcadvisor #aif #sebi #investmentfunds #privateequity #nbfc #venturecapital #wealthmanagement