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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)

Rahul Mehta, an investor in Pune, wants to invest in an AIF. He asks his adviser about the minimum investment amount per investor in an AIF (other than accredited investors and employees/directors of the AIF or manager). What is the correct minimum?

The minimum investment is Rs 1 crore per investor in an AIF. Employees or directors of the AIF or its manager may invest a lower minimum of Rs 25 lakh. This high threshold reflects that AIFs are privately pooled vehicles aimed at sophisticated, high net worth investors.

  1. ARs 10 lakh
  2. BRs 25 lakh
  3. CRs 1 croreCorrect
  4. DRs 5 crore

Explanation

The AIF Regulations require a minimum investment of Rs 1 crore from each investor, with relaxations for employees or directors of the AIF or its manager (Rs 25 lakh). Rs 25 lakh is therefore wrong for an ordinary investor. Angel funds have a lower minimum, but that is a special case not asked here.

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