Alternative Investment Fund

Category 1: (Venture Capital Funds) Start-up / Early stage funds, Infrastructure funds.

These are those AIFs which are positive and beneficial to the Indian economy and enhance growth. Hence these funds receive incentives or concessions by SEBI or the government of India. Such funds generally invest in start-ups or early stage ventures, social ventures, SME’s, infrastructure or other sectors which are considered socially or economically important for the country.

Start up funds / early stage funds:

Venture Capital Fund falls under Category 1 of the AIF regulations and is an investment fund that manages money from investors seeking private equity stakes in start-up and small and medium-size enterprises that show strong growth potential. These investments are generally characterized as high-risk/high-return opportunities.

Infrastructure Funds:

The Indian economy requires huge investments in developing infrastructure like roads and power. Infrastructure funds channelize investments into these companies and thus make money for investors.

Category 2: Private equity funds

Private Equity funds (especially Real Estate PE funds) typically reduce the risk profile by offering diversified investment portfolios managed by experienced fund managers. Thus, it provides the dual benefit of a defensive investment alternative as well as a hedge mechanism by offering an alternative asset class.

Category 3: Hedge Funds

These AIF’s are funds that undertake leverage to a great extent. These funds trade with a view to make short term returns. AIF’s bring significant benefits to investment portfolios through diversifying exposure away from traditional fixed income and equity assets.

Classified under Category 3 of alternative investment funds, hedge funds are an aggressively managed portfolio of investments. Hedge Funds use several types of strategies such as leveraged, long, short and derivative positions in both domestic and international markets. Karvy has two hedge funds in India under the name 'Systematic Edge Fund' and ‘Arbitrage Opportunities Fund’.

*Hedge Funds are offered through Karvy Capital Limited.

Structured Products

Structured Products are market linked investments instruments which have a payout linked to the performance of underlying assets such as equities or commodities. They possess unique risk-return profile that allows a certain level of principal protection option. Also since it is customized to a specific market view, it provides enhanced returns. All these unique advantages come with principal protection option.


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