Alternative Investment Funds (AIFs) have made an investment of over Rs 18,000 crore in 2015-16, more than double from the preceding fiscal.
In comparison, investments made by AIF — a class of pooled-in vehicles for investing in real estate, private equity and hedge funds — stood at Rs 7,357 crore in 2014-15.
Sebi had notified the AIF Regulations in 2012 covers funds under three categories, which subsumed the venture capital funds and foreign venture capital investors.
AIFs norms aim at extending the perimeter of regulation to unregulated funds with a view to systemic stability, increasing market efficiency, encouraging the formation of new capital and consumer protection.
“The total investments made by AIFs in 2015-16 were Rs 18,237 crore as compared to Rs 7,357 crore in the previous financial year,” Securities and Exchange Board of India (Sebi) said in its annual report.
Since the implementation of the regulations, more than 200 AIFs have been registered with Sebi.
The Category I infused Rs 2,828 crore, Category III pumped in Rs 3,907 crore and Category II (comprising of private equity funds and debt funds) made the highest investments of Rs 11,502 crore.
The Category-I — get incentives from the government, Sebi or other regulators and include social venture funds, infrastructure funds, venture capital funds and SME funds — infused Rs 2,828 crore in past financial year.
The Category-II (comprising of private equity funds and debt funds) made the highest investments of Rs 11,502 crore and Category -III trade to make short-term returns and includes hedge funds pumped in Rs 3,907 crore.
“Sebi is striving to introduce reforms in this private fund industry so as to facilitate capital-raising by AIFs and for boosting entrepreneurship,” the regulator said.
According to Sebi, the main source of active capital provided by private equity or venture capital plays a very important role in the growth of the corporate sector and it brings a lot of governance and good quality money on the table of an investee company.