Transcript
ALTERNATIVE INVESTMENT FUNDS
CA RUKMANI
INDEXATION• INTRODUCTION• STRATEGY of INVESTMENT• CATEGORIES• REGISTRATION PROCESS• STATISTICS of INVESTMENT• SILENT FEATURES OF INVESTMENT• DUE DILIGENCE• RISK IN INVESTMENT• CONCLUSION
INTRODUCTION• Anything alternate to the traditional form of
investment gets categorized as Alternate Investment.
• In short we can say other than Stock, Bond and Cash
Alternative Investment Strategy
Categories of AIFs
CATEGORY IINVESTMENT Primarily Invest in Startup Units or unlisted entities Etc.
Borrowing Allowed Only for Meeting Temporary Funding for limited period
Type of Funds Venture Capital Fund, Social Venture capital, SME Funds or Infrastructure Funds or other funds as notified
Type of Scheme Close Ended
Tenure 3 Years + 2 Years Extension
Limit Maximum 25 % in one Project
Capital Venture fund• A wealthy investor like bank invest their money into
long term growth companies. • It is highly risky investment because its done in the
startup level• Review the plan of the company.
Venture capital companies
• Show their plan to the Venture capital companies for fund
• In return of their Investment Company provide Venture capital stock as well as control over the management
• The valuation of the stock maturity period and other term and conditions are pre – decided.
A Small company/ Firms needs venture
fund
Social Venture Capital
• It is a form of Investment through Social Venture Capitalists In return to achieve a reasonable gain in financial return while delivering social Impact to the world
Investment Funding
• Debt Capital + capital ( Participation Right)• Secured with the Assets of the company
Investor Tax Relief
• Income Tax relief of 30 % + Exemption from Capital Gain at the time of Maturity
Social Venture Capital Firms
• Acumen Fund , Unitus Seed Funds, Grass roots Business funds etc.
SME FUNDS• Investment is this type of funds is a convenient
strategy for meting out the Challenges of Small and medium Enterprises market because its required a close follow up.
• Invest equity capital in private equity capital fund such as venture capital funds and other targeting for growth.
• Such Investment shall be lock for One year from the date of Investment.
• Investors Like : CASEIF II, Evolution One Fund Etc.
Infrastructure fund• Issued by non banking institution to develop the
infrastructure across the country.• Fixed Return having long term maturity period of 10 to
15 years.• Every investor need to keep at least five years for
getting tax benefits• Tradable in the market• In 2013-14, the RBI allowed to bank for issuing these
bonds but maturity upto 7 years and these bonds are exempted from the requirement of SLR and CRR.
• Top Infrastructure bonds are: IDFC Infrastructure Bonds L & T Infrastructure Bonds IDBI Flexi bonds IIFCL Long term Infrastructure Bonds IFCI Infrastructure Bonds
CATEGORY IIINVESTMENT Majorly In unlisted entities or units of CAT I or III
Borrowing Allowed Only for Meeting Temporary Funding for limited period
Type of Funds Private Equity or Debt Funds
Type of Scheme Close Ended
Tenure 3 Years + 2 Years Extension
Limit Maximum 25 % in one Project
Private Equity• Private Equity Structure– Three level• Private Equity Firms• Private Equity Funds• Private Equity Portfolio companiesPartnership Structure
General PartnerLimited PartnerLPA
CATEGORY IIIINVESTMENT Primarily In Securities of Listed or Unlisted Investee
Companies Derivatives or Complex Structured Products Borrowing Allowed Only for subject to consent of Investors and maximum
limit specified by BoardType of Funds Hedge Funds I.e. Derivaties
Type of Scheme Open or Close Ended
Tenure Close Ended : 3 Years + 2 Years Extension Open Ended : No Tenure
Limit Maximum 10 % in one Project
Registration under SEBI
Application Under Form A with
application fee of Rs. 1,00,000
Get Reply Within 21 days Subject to qualification
After Approval have to submit the
fees
For Category Ist Rs. 5,00,000 and for
others Rs. 1,00,000
Applicant get the Certificate as an
alternative investment Funds
Statistics of Investment
Jan14 to March14
April 14 to June14
July14 to Sep 14
Oct 14 to dec14
0
500
1000
1500
2000
2500
3000
3500
4000
4500
category Icategory IIcategory III
Figures in Crore asPer SEBI
Silent Features• Minimum Subscription would be Rs. 1
Crore or 0.01% of fund Raised.• Funds With Size Greater Than Rs. 500
Crore Would Need to have Custodian.• Maximum Number of Investors in the AIF
shall be 50• Winding Up Methodology need to be
explicitly Mentioned in the Prospectus. • No fund shall have Sub Funds Underlying.
Due Diligence Process
Structure of the Fund
Investment Strategy Review
Performance review
Risk Assessment
Administrative Review Legal review
Checking reference
Risk in InvestmentCredit and Liquidity risk
Benchmarking in Alternative Investments
Impact of Bias in the database
Dynamic and non- linear Dimensions
CONCLUSION• Investment can be made in a company,
LLP or Trust.• Tax Effective Structure can be planned to
avail tax benefits• May make investment whether in or
Outside India• Minimum Regulatory and disclosure
Requirement
Thank You
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