Eligibility and Investment: Your Complete FAQ on Minimum Ticket Sizes for Indian AIFs

Question 1. Can a retail investor invest in an AIF, or is it only for the ultra-wealthy or institutions?

To invest in AIFs, you don’t need to be a billionaire or UHNI or an institutional Investor; even an individual can invest in AIFs, basis the investor meets the eligibility requirements and the investment of Rs 1 Crore per scheme. 

If an investor commits this amount and fulfils standard KYC requirements, they are eligible. The key is having both the financial capacity and risk appetite that align with AIF investments, which are typically illiquid, long-term, and complex in nature.

Question 2. I'm an HNI but not an "accredited investor"—can I still invest?

India doesn't require formal "accredited investor" certification like the US does. The only real hurdle is financial - if you have ₹1 crore to invest, you're in. SEBI (Securities and Exchange Board of India) assumes that someone who can commit this amount is financially sophisticated enough to understand the risks involved. There's no exam, certification, or special approval needed.

Question 3. I’m an NRI—am I allowed to invest in Indian AIFs?

Yes, Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) can participate, but they face additional regulatory layers:

• FEMA (Foreign Exchange Management Act) governs cross-border money flows

• RBI (Reserve Bank of India) regulations apply to foreign investments

• Some funds may require extra paperwork or have restrictions based on the investor's country of residence

The fund manager might need to ensure compliance with both Indian and international regulations, so expect more documentation.

Question 4. I run a company. Can my company invest in an AIF, or is it only for individuals?

Absolutely, AIFs are not just for individual investors. In fact, many AIFs are structured to appeal to institutions, family offices, LLPs, trusts, and corporates.

As long as your entity can commit the ₹1 crore minimum investment per scheme and fulfilfulfill SEBI’s KYC and disclosure norms, it can invest. Corporations and institutions must also provide specific documents, including:

• Incorporation certificates

• Board resolutions authorising the investment

• Ultimate Beneficial Ownership (UBO) declaration

Question 5. Are there any specific KYC or documentation hurdles I should be ready for?

Yes, SEBI-regulated AIFs have a robust onboarding process to ensure transparency and compliance. For individuals, you’ll typically need:

• PAN card

• Address proof

• Bank details and source of funds

• FATCA/CRS declaration

For entities like companies, LLPs, or trusts, additional documents include:

• Incorporation certificates

• Memorandum of Association (MoA) and Articles of Association (AoA)

• Board or trustee resolutions

• UBO declaration

These requirements aim to prevent money laundering and ensure the legitimacy of each investor. 

Question 6. Why is the minimum investment ₹1 crore? That’s a big ask.

You’re right—it’s a significant sum. But SEBI intentionally set the ₹1 crore minimum investment to ensure that only financially capable and experienced investors participate in AIFs.

This serves several purposes:

• Risk awareness: AIFs carry a higher risk and lower liquidity compared to mutual funds or listed securities.

• Operational efficiency: Managing thousands of small-ticket investors would be complex and costly for fund managers
  
  

• Investor protection: It prevents retail investors, who may not understand the nuances of alternative investments, from entering risky structures.

Question 7. Is ₹1 crore per fund or per scheme? Can I split it across multiple funds under the same AIF manager?

Per scheme is the key phrase. Here's why this matters:

• One AIF manager might run multiple schemes (e.g., "Tech Fund," "Real Estate Fund," "Distressed Assets Fund")

• Each scheme is treated separately

• If you want to invest in 3 different schemes, you need ₹3 crore total (₹1 crore × 3)

• You cannot split your ₹1 crore across multiple schemes

Think of each scheme as a separate investment product requiring its own minimum commitment.

Question 8. Can I invest ₹50 lakh first and top it up later?

You must commit the full ₹1 crore upfront when signing the contribution agreement. However, there's nuance:

• The fund may draw down your commitment in tranches (taking ₹10 lakh per quarter, ₹20 lakh now, ₹30 lakh later, etc.)

• But your commitment must be ₹1 crore from day one

• You can't start with ₹50 lakh and decide to add more later - that initial commitment must be the full amount

   This ensures the fund manager knows exactly how much capital they can deploy.

Question 9. I heard AIF employees can invest with just ₹25 lakh. Can I qualify under any such exception?

That’s a valid point. The ₹25 lakh exception applies only to:

• Employees,

• Directors, and 

• Key Managerial Person of the AIF 

This provision is intended to allow those working within the AIF ecosystem to invest in lower amounts. Regular investors, even HNIs, cannot claim this exception.

Question 10: What if I want to invest jointly with a spouse or family member? Can we pool funds to meet the ₹1 crore minimum?

You cannot pool money, because the application will be in 1 person’s name; one single individual can invest ₹1 cr in the fund, not multiple people pooling ₹1Cr investment. 

Question 10: What if I want to invest jointly with a spouse or family member? Can we pool funds to meet the ₹1 crore minimum?

You cannot pool money, because the application will be in 1 person’s name; one single individual can invest ₹1 cr in the fund, not multiple people pooling ₹1Cr investment. 

What doesn't work:

• You + spouse pooling ₹50 lakh each = Still need ₹1 crore each

• Multiple family members combining smaller amounts

• SEBI treats each named investor separately

What does work:

• Creating a legal entity (family trust, LLP, or family office) that becomes the single investor

• That entity must have ₹1 crore and meet all entity investment requirements

• This effectively pools family wealth but creates a new legal investor

Why this rule exists: SEBI wants to prevent fragmentation where someone might divide their ₹1 crore investment into 10 different names to circumvent regulations.

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