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Alternative Investment Funds (AIF)

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Alternative Investment Funds

Alternative investment funds are investment solutions that allow investors to participate in exclusive opportunities beyond traditional stocks and mutual funds with the aim of creating superior long-term wealth.

Our AIF Solutions
Our Alternative Investment Fund solutions are designed for investors seeking access to differentiated opportunities beyond traditional assets:
Category III AIF strategies
Private placement investments
Diversified alternative exposure
Professionally managed structures
Long-term capital appreciation focus
Key Benefits of Investing with Infinite Alpha
Guided mutual fund investing provides you with the expertise, discipline, and support needed to navigate markets confidently and work toward your financial goals.
Access to Unique Opportunities
Better Portfolio Diversification
Higher Return Potential
Strategy-Led Investing
Long-Term Wealth Creation
Professional, Research-Driven Management
Start Your AIF Journey with Confidence
Take the next step toward disciplined, goal-based mutual fund investing with Infinite Alpha. Our expert team is ready to guide you through every stage of your investment journey.
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Frequently Asked Questions
Helpful information to guide you through common queries.
What is an Alternative Investment Fund (AIF)?
An AIF is a privately pooled investment vehicle that invests in assets or strategies beyond traditional stocks, bonds, and mutual funds, such as private equity, real estate, infrastructure, credit, or hedge fund strategies.
In India, AIFs are regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Alternative Investment Funds) Regulations, which govern fund structure, operations, disclosures, and investor protection.

AIFs are classified into three categories:

  • Category I: Venture capital, SME, social venture, infrastructure funds

  • Category II: Private equity, debt, fund of funds

  • Category III: Hedge funds and funds using complex or leveraged strategies

AIFs are intended for sophisticated investors, such as high-net-worth individuals (HNIs), family offices, institutions, and accredited investors who can understand and bear higher risks.
The minimum investment amount per investor is typically ₹1 crore, subject to SEBI regulations and specific fund terms (lower thresholds may apply to employees or directors of the fund).
Most AIFs have a fixed tenure ranging from 5 to 10 years, with possible extensions, depending on the investment strategy and asset class.

AIFs are generally illiquid investments. Investors usually cannot redeem units on demand and must wait for exits or distributions as investments mature.

Returns are generated through capital appreciation, income generation, or strategic exits, depending on the fund’s investment strategy and underlying assets.

Common fees include:

  • Management fee: Charged annually on committed or invested capital

  • Performance fee (carry): A share of profits above a defined hurdle rate

Risks may include market risk, illiquidity, leverage risk (especially in Category III), concentration risk, regulatory changes, and valuation uncertainty.

Tax treatment depends on the AIF category and underlying income. In India, Category I and II AIFs generally enjoy pass-through taxation, while Category III AIFs are taxed at the fund level, subject to prevailing tax laws.
AIFs follow prescribed valuation norms and typically appoint independent valuers to ensure fair and transparent valuation of portfolio assets.
Leverage is generally restricted for Category I and II AIFs but is permitted for Category III AIFs, subject to regulatory limits and disclosures.
AIFs provide periodic reports (quarterly or semi-annually) covering portfolio performance, valuations, risk metrics, and fund updates.
Investors typically exit through distributions from asset sales, fund maturity, or secondary transfers of units, subject to fund documents and regulatory approvals.
What is a Mutual Fund?
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by investment managers, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in the scheme information document.

Anybody with an investible surplus of as little as a few hundred rupees can invest in mutual funds. The investors buy units of a fund that best suits their investment objectives and future needs. A Mutual Fund invests the pool of money collected from the investors in a range of securities comprising equities, debt, money market instruments etc. after charging for the AMC fees. The income earned and the capital appreciation realised by the scheme, are shared by the investors in same proportion as the number of units owned by them.

Securities Exchange Board of India (SEBI) is the regulatory body for all the mutual funds mentioned above. All the mutual funds must get registered with SEBI.

For a retail investor who does not have the time and expertise to analyze and invest in stocks and bonds, mutual funds offer a viable investment alternative.

 

This is because:

1. Mutual Funds provide the benefit of cheap access to expensive stocks

2. Mutual funds diversify the risk of the investor by investing in a basket of assets

3. A team of professional fund managers manages them with in-depth research inputs from investment analysts.

4. Being institutions with good bargaining power in markets, mutual funds have access to crucial corporate information which individual investors cannot access.

There are several benefits from investing in a Mutual Fund.

 

A. Small investments: Mutual funds help you to reap the benefit of returns by a portfolio spread across a wide spectrum of companies with small investments. Such a spread would not have been possible without their assistance. Professional Fund Management: Professionals having considerable expertise, experience and resources manage the pool of money collected by a mutual fund. They analyze markets and the economy to select good investment opportunities.

 

B. Spreading Risk: An investor with a limited amount of fund might be able to invest in only one or two stocks / bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing in a number of sound stocks or bonds, across sectors, so the risk is diversified, along with taking advantage of the position it holds. Also in cases of liquidity crisis where stocks are sold at a distress, mutual funds have the advantage of the redemption option at the NAVs (Net Asset Values).

 

C. Transparency and easy access to information: Mutual Funds regularly provide investors with information on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type and clearly layout their investment strategy to the investor.

 

D. Liquidity: Closed ended funds have their units listed at the stock exchange, thus they can be bought and sold at their market value. Over and above this the units can be directly redeemed to the Mutual Fund as and when they announce the repurchase.Open ended funds, the units are available for subscriptions redemption on all business days on an ongoing basis.

 

E. Choice: The large amount of Mutual Funds offer the investor a wide variety to choose from. An investor can pick up a MF scheme depending upon his risk / return profile.

 

F. Regulations: All the mutual funds are registered with SEBI and they function within the provisions of strict regulation designed to protect the interests of the investor.

 
An investor can reduce his total risk by holding a portfolio of assets instead of only one asset. This is because by holding all your money in just one asset, the entire fortunes of your portfolio depend on this one asset. By creating a portfolio of a variety of assets, this risk is substantially reduced.
No. Mutual fund investments are not totally risk free. In fact, investing in mutual funds contains the same risk as investing in the markets, the only difference being that due to professional management of funds the controllable risks are substantially reduced.
A very important risk involved in mutual fund investments is the market risk. When the market is in doldrums, most of the equity funds will also experience a downturn. However, the company specific risks are largely eliminated due to professional fund management.

On the basis of Objective

 

A. Equity Funds/ Growth Funds

Funds that invest in equity shares are called equity funds. They carry the principal objective of capital appreciation of the investment over the medium to long-term. The returns in such funds are volatile since they are directly linked to the stock markets. They are best suited for investors who are seeking capital appreciation. There are different types of equity funds such as Diversified funds, Sector specific funds and Index based funds.

 

B. Diversified funds

These funds invest in companies spread across sectors. These funds are generally meant for risk-taking investors who are not bullish about any particular sector.

 

C. Sector funds

These funds invest primarily in equity shares of companies in a particular business sector or industry. These funds are targeted at investors who are extremely bullish about a particular sector.

 

D. Index funds

These funds-invest in the same pattern as popular market indices like CNX Nifty Index and BSE Index. The value of the index fund varies in proportion to the benchmark index.

 

E. Tax Saving Funds

These funds offer tax benefits to investors under the Income Tax Act.Opportunities provided under this scheme are in the form of tax rebates u/s 88, saving in Capital Gains u/s 54EA and 54EB and deductions u/s 80C. They are best suited for investors seeking tax concessions.

 

F. Debt / Income Funds

These Funds invest predominantly in high-rated fixed-income-bearing instruments like bonds, debentures, government securities, commercial paper and other money market instruments. They are best suited for the medium to long-term investors who are averse to risk and seek capital preservation. They provide regular income and safety to the investor.

 

G. Liquid Funds / Money Market Funds

These funds invest in highly liquid money market instruments. The period of investment could be as short as a day. They provide easy liquidity. They have emerged as an alternative for savings and short-term fixed deposit accounts with comparatively higher returns. These funds are ideal for Corporates, institutional investors and business houses who invest their funds for very short periods.

 

H. Gilt Funds

These funds invest in Central and State Government securities. Since they are Government backed bonds they give a secured return and also ensure safety of the principal amount. They are best suited for the medium to long-term investors who are averse to risk.

 

I. Balanced Funds

These funds invest both in equity shares and fixed-income-bearing instruments(debt) in prescribed proportion. They provide a steady return and reduce the volatility of the fund while providing some upside for capital appreciation. They are ideal for medium- to long-term investors willing to take moderate risks.

In an open-ended mutual fund there are no limits on the total size of the corpus. Investors are permitted to enter and exit the open-ended mutual fund at any point of time at a price that is linked to the net asset value (NAV). In case of closed-ended funds, the total size of the corpus is limited by the size of the initial offer.
NAV is the net asset value of the fund. In simpler words it reflects what the unit held by an investor is worth at current market prices.
Investors need to be clear that mutual funds are essentially medium to long term investments. Hence, short-term abnormal profits will not be sustainable in the long run. But in the medium to long run the mutual funds tend to outperform most other avenues of investments at the same time avoiding the risk of direct investment accompanied with professional fund management.

Mutual Funds give returns in two ways – Capital Appreciation or Dividend Distribution.

 

A. Capital Appreciation : An increase in the value of the units of the fund is known as capital appreciation. As the value of individual securities in the fund increases, the fund`s unit price increases. An investor can book a profit by selling the units at prices higher than the price at which he bought the units.

 

B. Dividend Distribution: The profit earned by the fund is distributed among unit holders in the form of dividends. Dividend distribution again is of two types. It can either be re-invested in the fund or can be on paid to the investor.

The NAVs are published in financial newspapers and also available on the AMFI website on a daily basis.

The charge collected by a Mutual Fund from an investor for selling the units or investing in it.

When a charge is collected at the time of entering into the scheme it is called an Entry load. The entry load percentage is added to the NAV at the time of allotment of units. However SEBI has now prohibited charging entry load on mutual fund schemes. An Exit load is a charge that is collected at the time of redeeming or for transfer between schemes (switch). The exit load percentage is deducted from the NAV at the time of redemption or transfer between schemes.

Some schemes do not charge any load and are called “No Load Schemes”.

An exit load is a levy that an investor pays at the point of exit. This is levied to dissuade investors from exiting the fund. Assume that the current NAV of the fund is Rs.12.00 and that the exit load is Rs.0.50. Now if you sell 800 units then you stand to receive 800X11.5= Rs. 9200.
Yes. One can redeem part units also.

Though Close-Ended Mutual Funds are listed on the exchange they have a limited number of shares and trade at substantial premiums or more often at discounts to the actual NAV of the scheme. Also, they lack the transparency, as one does not know the constitution and value of the underlying portfolio on a daily basis.

In ETFs, the numbers of units issued are not limited and can be created/ redeemed throughout the day. ETFs rely on market makers and arbitrageurs to maintain liquidity so as to keep the price in line with the actual NAV.

Bond prices are sensitive to changes in interest rate. Typically active fund managers tend to alter the duration of the fund based on their interest rate outlook, whereas in case of Constant Maturity structure the overall duration at fund level is maintained in the pre-set range.
Like any other debt mutual fund schemes, there are no assured returns.
If the investment is held for more than 3 years it qualifies for Long Term Capital Gains Tax @ 20%, along with option to avail indexation benefit. Any investment horizon lower than 3 year, would attract the Short Term Capital Gain Tax and taxed as per the applicable tax bracket.
What is Portfolio Management Services (PMS)?

PMS (Portfolio Management Service) is a tailor made professional service offered to cater the investments objective of different investor classes. The Investment solutions provided by PMS cater to a niche segment of clients. The clients can be Individuals or Institutions entities with high net worth. In simple words, PMS (portfolio management service) provides professional portfolio management of your investments to create wealth..

There are many benefits of availing Portfolio Management Services. Some of them are:
1. Professional Management : PMS provides professional management of portfolios with the objective of  delivering consistent long-term performance while controlling risk.

2. Constant Portfolio Tracking : We understand the dynamics of equity as an asset class, so we track your investments continuously to maximize the returns.

3. Risk Control : Well defined investment philosophy & strategy acts as a guiding principle in defining the investment universe. We have very robust portfolio management software that enables the entire construction, monitoring and the risk management processes.

4. Convenience : Our Portfolio Management Service relieves you from all the administrative hassles of your investments. We provide periodic reports on the performance and other aspects of your investments.

5. Transparency : You will get account statements and performance reports on a monthly basis. That’s not all; web access will enable you to track all information relating to your investment on daily basis.A password protected web login will enable you to access details of your investment on click of a button. The following portfolio reports are accessible online:
     5.1 Performance Statements
     5.2  Portfolio Holding Reports
     5.3 Transactions Statements
     5.4 Capital Gain/Loss Statements
Along with it we also send half yearly reports and yearly Audited reports for convenient Tax Filing.

6. Dedicated Relationship Manager : Your Relationship manager will help you carefully understand your financial goals and advise you the right product mix. The relationship managers ensure that you receive periodic updates and account performance reports.

7. Personalized Approach : In PMS, you gain direct personalized access to the professional money managers who actively manage your portfolio. This interaction may come in various different ways including in-person meetings, conference calls, written commentary, etc. with the fund management team.

We provide each client an audited tax statement of his portfolio management annually. This can be used for calculating your tax liability and hence forth filing returns. However, we advice all our clients to consult their tax consultant before filing of their tax returns.

As a part of our service offering and in an endeavor to provide complete transparency of the dealings in the clients PMS account, the following reports are emailed to the clients to their registered email id/ mailed to the correspondence address, which will enable the clients to track their portfolios. The reports are sent on a monthly basis before the 10thof the next month.

 

1. Account Performance Statement

2. Holding Statement

3. Transaction Statement

4. Capital Movement Statement

5. Corporate Action Statement

6. Debit Note

7. Client Information

8. Taxable Gain/Loss statement

9. Clients are provided with a login id and password which will enable 24*7access to the details of the investments on click of a button.

10. Audited reports certified by a CA will be sent to all clients annually after March-year end audit is completed.  

Motilal Oswal Asset Management Company Ltd provides discretionary Portfolio Management Services wherein the portfolio manager manages your portfolio without having to bother you with the day to day decisions. The portfolio manager takes all the investment decisions on your behalf.

 

However, we do a comprehensive reporting to maintain complete transparency in managing your portfolio. You will receive regular updates and a detailed report on your portfolio, allowing you to track its activity and performance.

We offer discretionary as well as non-discretionary portfolio management services. In our discretionary portfolio management service, the discretion to invest primarily lies with the portfolio manager. However at the time of giving us the portfolio you can give us list of securities, sectors, etc. which you do not/cannot invest in your portfolio due to reasons like conflict of interests, religious beliefs etc. and we will take care of your need.
In our PMS, we understand that you have given us your hard earned money and therefore we ensure that we answer every query. You can anytime request for an appointment/call and we will arrange a meeting/call with the fund management/Investment advisory team for discussion about portfolio spread and returns or any other query you may have regarding your portfolio.
Yes, you can withdraw your profit anytime you want, provided your portfolio‘s value does not fall below the prescribed limit of Rs. 25 Lacs, as per SEBI regulations.
You can give minimum Rs.50,000 as a Top Up (additional investment) in any of your strategy accounts.

Your PMS account will activate only after you deposit a minimum of Rs. 50 lacs in the account (combination of cash and stocks). To put in money, you can use one of the following ways:

 

1.Cheques:

                will be in the name of Motilal Oswal Asset Management Company Ltd.–PMS for all strategies. The strategy names will not be required to be mentioned on the cheques

 

2.Bank Transfer:

                If you have banking facilities you can transfer funds in Indian Rupees to your PMS account by online   transfer (RTGS/NEFT) or wire transfer.

You can use your current securities / shares to make investment in PMS Account, but these will have to be liquidated and the sale amount should be minimum Rs. 25,00,000.
The Portfolio Management Services is open for all Indian nationals, resident or otherwise.NRIs will have to open a PIS Account as required under RBI guideline sin order to invest in the PMS scheme.
Yes, you can open a PMS account with a combination of cash and stocks. The initial portfolio of securities/ shares will be re-aligned as per the model portfolio

You can open a PMS account with us, if you are:

 

   1. An Individual

   2. A Hindu Undivided Families

   3. An Association of Persons

   4. A Limited Companies

   5. An NRI, overseas company, firm, society or an overseas trust (subject to RBI approval)

You can open a PMS account by emailing or calling us at our exclusive PMS desk. Once we receive your request one of our executives will get in touch with you shortly. You can call us on: 1800-200-6626 or email us at: info@infinitealpha.in. You can visit our Website: infinitealpha.unmeteredtechnologies.com/Asset-Management

1. Amongst India’s one of the leading PMS Service Providers, with Assets under Management of approx Rs. 2700 Crores as on 31st December 2014.

 

2. Value Strategy is the single biggest discretionary PMS strategy in the country withal of over Rs. 1225 crores as on 31st December 2014 clearly showing client’s trust in our product’s performance &services.

 

3. Our Flagship “Value Strategy” has consistently outperformed the benchmark across market cycles over a 11 year period.

 

4. Motilal Oswal PMS has one of the largest active customer base of 4500+ on PMS Platforms on 31st December 2014 clearing showing strong trust developed with customers.

 

5. 1crore invested in Value PMS in March 2003 is worth Rs. 17.86 crores as on 31st December 2014 v/s. just 8.19 Crores if it would have been invested in CNX Nifty Index.

 

6. Motilal Oswal Portfolio Management Services has active clients in 138 different cities right from Agra to Vijayawada; a testimony of strong acceptance of our PMS across the length & breadth of the country.

 

Data as on 31st December 2014

Investments in Securities are subject to market and other risks and there is no assurance or guarantee that the objectives of any of the strategies of the Portfolio Management Services (PMS) will be achieved. Investors in the PMS Product are not being offered any guaranteed/assured returns. Past performance of the portfolio manager does not indicate the future performance for any of the strategies.

 
What is a demat account and what are the types of demat account?
A Demat account is an account that holds financial securities in electronic form. In India, Demat accounts are maintained by two depository organisations, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).

A Demat account is an account that holds financial securities in electronic form. In India, Demat accounts are maintained by two depository organisations, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).

What is a demat account and what are the types of demat account?
A Demat account is an account that holds financial securities in electronic form. In India, Demat accounts are maintained by two depository organisations, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).

A Demat account is an account that holds financial securities in electronic form. In India, Demat accounts are maintained by two depository organisations, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).