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Monday, September 24, 2012

20 entities seek SEBI nod to set up AIFs

As many as 20 entities have sought SEBI’s approval to set up Alternative Investment Funds (AIFs), a newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds.

SEBI (The Securities and Exchange Board of India) has already allowed seven AIFs to set up shop in the country, all of which got their approvals from the market regulator last month.

According to the latest SEBI data, 20 applications were pending with it for registration as AIFs as on August 31, 2012.

The regulator had notified in May this year the guidelines for a new class of market intermediaries named AIFs, which are basically funds established or incorporated in India for the purpose of pooling in of capital from Indian and foreign investors for investing in line with a pre-decided policy.

Of the 20 pending applications, SEBI said 15 applications were “being processed”, while the regulator has sought further details from five others as they had provided “incomplete information” as on August 31.

Most of these applications were filed in August, while some were submitted in June and July as well.

SEBI last month decided that promoters of listed companies can offload 10 per cent of their equity to AIFs to attain a minimum 25 per cent public holding.

Among others, registration has been sought by CapAleph Indian Millennium Fund, DSP BlackRock, HDFC AMC Real Estate, India Advantage Fund, India Realty Fund, Kedaara Capital, Kotak Alternative Opportunities Fund, Real Estate Opportunities Trust and Start-up Village Fund.

Entities whose applications have “incomplete information” are — CapAleph Indian Millennium Private Equity Fund, DARC MentorCap Film Fund, IIFL Opportunities Fund, IIFL Private Equity Fund and L&T Infra Investment Partners.

The AIFs already registered with SEBI include IFCI Syncamore India Infrastructure Fund, Excedo Realty Fund, Sabre Partners Trust and KKR India Alternate Credit Opportunities Fund.

Under SEBI guidelines, AIFs can operate under three broad categories. The SEBI rules apply to all AIFs, including those operating as private equity funds, real estate funds and hedge funds, among others.

Category-I AIFs are funds that get incentives from the Government, SEBI or other regulators and include Social Venture Funds, Infrastructure Funds, Venture Capital Funds and SME Funds.

The Category-III AIFs trade with a view to make short-term returns and include hedge funds, among others.

The Category-II AIFs can invest anywhere in any combination but are prohibited from raising debt, except for meeting their day-to-day operational requirements. These AIFs include PE funds, debt funds or fund of funds, as also all others falling outside the ambit of two other categories.


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