Finance Ministry allots non-gov provident funds to invest in AIFs
On March 15th, the Finance Ministry allows privately operated non-gov provident funds to invest 5% of the corpus in alternative investment funds. It also allows Superannuation and gratuity funds to make investments in AIFs. Those are SEM Funds, Venture Capital, Social Venture Capital, and Infrastructure Funds.
According to the source, the FM declared that investments by privately manager Provident PFs and others only allow in AIFs. It allows a corpus of at least Rs. 100 crores.
Besides, the exposure to a single Alternative Investment Fund shall not exceed 10% of the alternative investment fund size. Moreover, this limit might not apply to a government-sponsored AIF.
As per the source, the permitted funds under category I AIFs are infrastructure, SME, Venture Capital, and Social Venture Capital Funds.
For class II-AIFs, at any rate, 51% of the assets of such AIF will put resources into both of the foundation substances or SMEs or investment or social government assistance elements. Assets to guarantee that speculation ought not to be made straightforwardly or in a roundabout way in the protection of the organizations or assets consolidated and additionally worked outside India.