A debt fund is an Alternative Investment Fund (AIF) that invests primarily in debt or debt securities of listed or unlisted investee companies according to the stated objectives of the fund. [Ref. Regulation 2(1)(i)]. These funds are registered under Category II. In this regard, it is clarified that, since Alternative Investment Fund is a privately pooled investment vehicle, the amount contributed by the investors shall not be utilized for the purpose of giving loans.