Category I AIF:
Focus on investments in sectors that have the potential for positive spillover effects on the economy. These funds typically target early-stage start-ups, small and medium-sized enterprises (SMEs), infrastructure projects, and social ventures. Category I AIFs play a crucial role in fostering innovation, entrepreneurship, and economic development.
Category II AIF
Encompass a broad spectrum of investment strategies, including private equity, venture capital, and debt funds. Unlike Category I AIFs, which have specific investment mandates, Category II AIFs have a more flexible investment approach. These funds may invest in listed or unlisted securities, derivatives, structured products, and other alternative assets to generate attractive risk-adjusted returns.
Category III AIF
They are designed for investors seeking exposure to sophisticated trading strategies and alternative assets. These funds engage in complex trading activities such as derivatives trading, arbitrage, and hedging to capitalize on market inefficiencies and generate alpha.