The number of entities registered under the Alternative Investment Funds (AIFs) regulations that were notified by the capital market regulator in May is seeing a steady rise. From nine entities last month, the number has risen to 21 in December.
According to the latest data available with the Securities and Exchange Board of India (Sebi), a total of 21 entities have been registered under AIF norms, which also includes three registrations as Category 3 funds that is typically for hedge funds and other highly leveraged players.
Quant First Alternate Investment Trust, IIFL Opportunities Fund and Forefront Alternative Investment Trust are the three funds registered under Category 3 that covers all those that employ diverse or complex trading strategies and also leverage through investment in listed or unlisted derivatives.
Sebi has created three broad categories of funds based on the investment style and the potential impact on the markets and the economy. Category I AIF, which has seen six registrations, includes those that invest in start-ups, early-stage ventures, social ventures, SMEs, infrastructure and other sectors that the government or regulators consider as socially or economically desirable.
Funds, backed by IFCI and IL&FS, along with entities like Utthishta Yekum Fund, Indiaquotient Investment Trust and Capaleph India Millennium SME Fund, have been registered under Category 1.
Similarly, Category II AIF, which has seen the bulk of registrations, includes those that do not undertake leverage or borrowing other than to meet day-to-day operational requirements. This category is aimed at private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other regulator.
The AIF guidelines regulate all private equity players, venture funds, real estate funds and even hedge funds. The notification was issued in May ? nearly a month-and-a-half after the Sebi board approved the guidelines.
