AIFs bloom on easier norms

Total inflows double to Rs 24,862 crore over past year; however, more changes needed, say observers

Alternative Investment Funds (AIFs) are reaping dividends from an easier regulatory framework. In the past year, investments made by these entities have increased more than two fold to Rs 24,862 crore, shows data from the Securities and Exchange Board of India (Sebi).

AIFs are pooled funds, similar to mutual funds but with more liberal investment norms. The investment size is higher, given the high risk associated with these products. 

There are three categories. Category-I comprises infrastructure, social venture and small & medium enterprise funds. These attract special concessions, including tax breaks for investors, and were designed to fund capital-intensive sectors. 

Category-II consists of