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A Suite of products designed with an aim to strategically manage long term wealth Creation.
Alternate investment Fund or AIF means any fund established or incorporated in India which is privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or Foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
Key characteristics of AIFs:
Types of AIFs
Key Differences:
Mutual Fund |
PMS |
AIF |
|
Investor Base |
Open to retail investors and institutional investors |
Typically limited to High net worth Individuals (HNIs) with a higher minimum investment requirement |
Primarily targeted towards sophisticated and accredited investors, including institutional investors, HNI, family offices and private equity firms. |
Investment Size |
Investors can start with a small amount due to the ability to purchase fractional units. Minimum investment amount is INR 500 |
Requires a higher minimum investment amount of INR 50 Lakhs due to personalised and tailored investment strategies. |
Requires a higher minimum investment amount of INR 1 Cr due to personalised and tailored investment strategies. |
Segregation of Funds |
No segregation is required to be done |
Under PMS Model, funds of every client is segregated and kept in different D-Mat accounts |
Pooling of funds is the main essence of this kind of investment model |
Investment strategy |
Offers predefined investment strategies (e.g. equity funds, debt funds, balanced funds) that are followed by the fund manager. |
Provides flexibility to create personalised investment strategies based on individual client requirements and objectives. |
Driving multi strategic vehicles that can expand into private equity, derivative products etc. |
Liquidity |
Offers daily liquidity, allowing investors to buy or sell units at the prevailing Net Asset Value (NAV) |
Less liquid compared to mutual funds. Redemption terms and lock in periods may apply depending on the PMS structure and agreement. |
Limited liquidity is primarily due to the nature of the alternate assets in which AIFs invest. Such as private equity, real estate, hedge funds or venture capital. These investments often require a longer time horizon to achieve their intended objectives. |
Taxation |
Tax implications depend on the type of mutual fund and the holding period. |
Taxed at investor level |
Taxations as per category |
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