Why Choose an AIF?
A Category III Alternative Investment Fund is a SEBI-regulated pooled vehicle for sophisticated investors who want professionally managed exposure to listed and unlisted companies over the long term.
What a Category III AIF Offers
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Research-led management
A dedicated team researches, selects and monitors every investment, including through direct work with management and industry.
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A wider investment universe
The fund can invest in listed, unlisted and pre-IPO companies, beyond what traditional vehicles typically hold.
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One investment, the full portfolio
Investors own units of a single pooled fund and gain exposure to the entire portfolio from the start, with fund-level custody, administration and reporting.
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Tax handled at the fund level
Tax is paid by the fund, so distributions reach investors post-tax. Investors should consult their own tax adviser.
Suited to investors who can commit at least ₹1 crore, accept higher risk and lower liquidity than a mutual fund, and hold for several years.
Category I vs. II vs. III: Where Each One Fits
SEBI classifies Alternative Investment Funds into three categories based on what they invest in and how they invest. Each plays a different role in a company’s growth cycle — from an early-stage idea, to a growing business, to an established listed company.
From idea to minimum viable product
Category I AIFs invest in start-ups, early-stage ventures, SMEs, social ventures and infrastructure — areas the government considers economically or socially desirable. Their capital helps young businesses take an idea to a working product.
Venture capital, angel, SME, social venture & infrastructure fundsFunding expansion
Category II AIFs are funds that don’t fall under Category I or III and don’t borrow to invest, other than for day-to-day operational needs. They typically back growth-stage companies as they scale and expand.
Private equity, debt & fund-of-fundsCategory III AIFs invest in listed and unlisted securities and may use diverse or complex trading strategies, including leverage within regulatory limits.
Nexus Equity Growth Fund is a Category III AIFCategories as defined under the SEBI (Alternative Investment Funds) Regulations, 2012.
Which Investment Vehicle is Right for You?
When navigating the investment landscape, it's essential to understand the differences between Alternative Investment Funds (AIFs), Portfolio Management Services (PMS), and Mutual Funds (MFs). Each offers unique features, benefits, and strategies tailored to different investor profiles and objectives. Here's a comprehensive comparison to help you make an informed decision.
| Detail | Alternative Investment Funds (AIFs) | Portfolio Management Services (PMS) | Mutual Funds (MFs) |
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| Overview | Pooled funds for sophisticated investors, managed by a SEBI-registered investment manager and investing in listed and unlisted securities. | PMS provides personalized portfolio management tailored to an investor's financial goals, risk tolerance, and preferences. It allows investors to own individual securities managed by professional fund managers. | Mutual Funds are pooled investment vehicles that cater to a broad range of investors, providing diversification and convenience. They are widely accessible and professionally managed, offering options across equities, debt, and hybrid instruments. |
| Key Features |
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| Ideal for | Sophisticated investors with a long-term horizon who can commit ₹1 crore or more and accept higher risk and lower liquidity. | High-net-worth individuals (HNIs) who prefer direct ownership of securities and personalized investment strategies. | A wide range of investors, from low to high risk depending on the scheme. |