



Inside AIFs: The risks, rewards and real fit for your portfolio
Subscribe to enjoy similar stories. Smita and Ravi, a married couple in their late 30s, are steadily climbing the corporate ladder. Their investment portfolio has grown to over ₹4 crore, and for some time now, their wealth adviser has been making the case for investing in an alternative investment fund (AIF).
However, the minimum ticket for this, as per regulations, is ₹1 crore, and they are unsure if it really fits into their portfolio. Meanwhile, Arindam, retired and in his mid-60s, has been carefully managing his corpus, which stands at ₹9 crore. His bank relationship manager has also proposed several AIFs to him, including private equity and real estate.
He feels he can afford to commit ₹1 crore, but given his age, he is wary of the long locked-in tenures. Additionally, he is unsure how to assess the risks involved. Srinivas, 44, the founder of a chain of cafes, believes he has his finances sorted out.
His investment portfolio is at ₹12 crore and diversified between listed equities, mutual funds and angel investments. He, too, has been hearing about venture capital funds for a while and is not sure if that’s something he should have exposure to. Let’s go through a quick tutorial to assist these individuals in making an informed choice.
Structure: First and foremost, AIFs are ‘privately’ pooled vehicles (that’s why no newspaper advertisements), that invest in strategies different from traditional listed equity or debt, and are mostly suitable for investors willing to take higher risks for potentially higher returns. Ticket Size: To create a filter and let in only sophisticated investors, the Securities and Exchange Board of India (Sebi)has prescribed a minimum ₹1 crore investment in AIFs. So as a starting point, an
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