Setting Up of an Alternative Investment Fund in India

Abstract

The Securities and Exchange Board of India had issued the SEBI (Alternative Investment Funds) Regulations, 2012 which has broadened the scope of SEBI to monitor almost all kinds of private funds in India, including real estate funds and hedge funds. Until now, the only regulation that governed a limited category of private funds in India was the SEBI (Venture Capital Funds) Regulations, 1996 which had intended to promote investments into start-ups and mid-size companies. However, most venture capital funds operated as real estate funds, infrastructure funds, etc. Thus, a need was felt to frame a more exhaustive set of regulations to govern all such kinds of private funds, viz. venture capital funds, real estate funds, social ventures funds, SME funds, etc. and also open up market for more complex structures such as hedge funds.This white paper seeks to sets out the different kinds of alternative investment funds that can be set up in India, along with all the regulatory compliances, restrictions and implications thereof under the Indian laws. This paper is a summary of the SEBI Regulations that provide all information that a person should know for setting up an alternative investment fund in India.