Alternative Investment Fund
Also called AIF, Category I AIF, and Category II AIF
India's legal form for a privately pooled investment fund registered with SEBI. Category I covers venture capital, angel, social venture and infrastructure funds; Category II covers private equity, debt and other funds that do not borrow to invest; Category III covers funds that trade, often with leverage.
Why it matters
Almost every Indian VC fund that writes a cheque is a Category I or II AIF, and the government's Fund of Funds invests only through AIFs. The category tells you what a fund may invest in, how it is regulated, and why its money comes with reporting of its own.
For example
A Bengaluru seed fund registers with SEBI as a Category I venture capital fund, raises from family offices, and invests in twenty startups over four years.
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