Two more entities have received market regulator Sebi's approval to set-up Alternative Investment Funds (AIFs), a newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds.
The approval has been given to two AIFs by the Sebi (Securities and Exchange Board of India) within a period of less than one month, as per the information available with the market regulator.
Sebi had already allowed seven AIFs to set up shop in the country. As on August 31, 2012, as many as 20 applications were pending with Sebi for registration as AIFs.
The regulator had notified in May this year the guidelines for a new class of market intermediaries named AIFs, which are basically funds established or incorporated in India for the purpose of pooling in of capital from Indian and foreign investors for investing as per a pre-decided policy.
The two AIFs that have registered with Sebi during September and October are --Real Estate Opportunities Trust and Dicci Trust.
Besides, seven AIFs that have registered with Sebi include IFCI Syncamore India Infrastructure Fund, Utthishta Yekum Fund, Indiaquotient Investment Trust, Forefront Alternate Investment Trust, Excedo Realty Fund, Sabre Partners Trust and KKR India Alternate Credit Opportunities Fund.
As per Sebi data, most of these applications were filed in August, while some were submitted in July September and October as well.
Sebi in August decided that the promoters of listed companies can offload 10 per cent of equity to AIFs such as such as SME Funds, Infrastructure Funds, PE funds and Venture Capital Funds registered with the market regulator to attain minimum 25 per cent public holding.
Under Sebi guidelines, AIFs can operate broadly in three categories. The Sebi rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others.
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 make short-term returns and include 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 PE funds, debt funds or fund of funds, as also all others falling outside the ambit of two other categories.