AIF or Alternative Investment Funds gives the wealthy and sophisticated individuals an opportunity to invest in their desired sectors by pooling their funds. However, if you are willing to invest in the fund, then it is important to get an idea of AIF minimum investment.
Let’s just hang tight till the end as we give you all the necessary information in this article.
What is the Minimum Investment Amount in AIF?
Now as already known that there are different types of AIF funds, that provide the investor with an option to diversify their portfolio. Now among different types, there is one called Angel Fund.
The minimum investment for Angel Fund is ₹25 Lakh while for other types falling under different categories this investment is ₹1 crore for each investor.
Along with that, an AIF must have a minimum corpus of ₹ 20 crores to be functional, i.e, the total value of the investments coming from different investors to the pool must at least be ₹ 20 crores.
Apart from this, there are other fees and charges associated with the AIF funds the detail of which is given below.
Since Alternative Investment Funds are being managed by an AIF sponsor and hence as an investor you have to pay a certain fee to avail the services, which is a continued payment of 2.5%-5% or ₹5 crores-₹10 crores whichever is lower.
Now again like the minimum investment differs for the Angel Investor so does the commission or fees associated with the investment.
The continuing interest the sponsor in an Angel fund has to pay is the lower value between ₹ 2 Lakh and 2.5% of the entire corpus.
Here is the summary of the AIF minimum investment:
AIF Minimum Investment
Alternative Investment Fund
Minimum investment amount required for one investor
₹ 1 crore
₹ 25 Lakh
Minimum Corpus required
₹ 20 crores
₹ 10 crores
Continuing interest as a sponsor
2.5% of the corpus or ₹ 5 crores, whichever is lower in category 1 & category 2
2.5% of the corpus or ₹ 2 Lakh, whichever is lower in value
5% of the corpus or ₹ 10 crores, whichever is lower in category 3
Since the majority of the AIF investments do not include investing in stocks, AIF products remain independent of the market volatility and thereafter, it becomes a relatively safer and more reliable investing option. Also, Alternative Investment Funds regulated by SEBI further make it secure for investment.
Along with being a less volatile investment option, it also gives the investors plenty of options to invest in as there is no shortage of non-traditional assets.
Henceforth, AIF becomes a pretty interesting investment option for high profile and high net worth individuals who want to diversify their portfolios by investing in a wide range of assets.