⚠️ Important — AIF is a High-Risk, Illiquid Investment — Read Before Proceeding
Alternative Investment Funds (AIF) are suitable ONLY for sophisticated investors with minimum Rs. 1 Crore investable surplus, high risk tolerance, and ability to lock in capital for 3 to 7 years. AIF investments involve significant illiquidity risk, capital loss risk, and concentration risk. Past performance does not guarantee future returns. Please read the AIF Private Placement Memorandum (PPM) carefully before investing.
Alternative Investment Funds (AIF) — Disclosure
Per SEBI (Alternative Investment Funds) Regulations 2012 | Mandatory Disclosure for AIF Distribution
UPPSCALLE INVESTMENTS PVT LTD | 182598 | Last Updated: August 2026
About This Disclosure
UPPSCALLE INVESTMENTS PVT LTD (182598) is empanelled as a distributor with the Alternative Investment Fund managers listed on this page. This disclosure is made in accordance with SEBI (Alternative Investment Funds) Regulations 2012 and subsequent SEBI circulars. Investors are strongly advised to read the complete Private Placement Memorandum (PPM) of each AIF before making any investment decision.
1. What is an Alternative Investment Fund (AIF)?
An Alternative Investment Fund (AIF) is a privately pooled investment vehicle that collects funds from sophisticated investors (Indian or foreign) for investing in accordance with a defined investment policy — under SEBI (AIF) Regulations 2012. AIFs invest in asset classes that are different from conventional investments like stocks, bonds, and Mutual Funds.
- Private Pooling: AIF pools capital from a limited number of sophisticated investors — not open to general public like Mutual Funds
- Minimum Investment: Rs. 1 Crore per investor (accredited investors may have different thresholds)
- Lock-in Period: Typically 3 to 7 years — illiquid during lock-in period
- Closed-Ended: Most AIFs are closed-ended — units cannot be redeemed before maturity
- SEBI Regulated: All AIFs must register with SEBI under SEBI (AIF) Regulations 2012
- Document: Private Placement Memorandum (PPM) — equivalent of SID in Mutual Funds
- Investor Limit: Maximum 1,000 investors per AIF scheme (Category I & II) / 1,000 for Category III
2. The Three Categories of AIF — Understanding the Differences
Category I AIF
Positive socio-economic impact — Government encouraged
Invests in start-ups, early stage ventures, social ventures, SMEs, infrastructure, and sectors considered economically or socially desirable by the government.
Examples: Venture Capital Funds, SME Funds, Social Venture Funds, Infrastructure Funds, Angel Funds
Category II AIF
Neither Cat I nor Cat III — No leverage (except operational)
Private Equity (PE) Funds, Debt Funds, Real Estate Funds, Fund of Funds that do not use leverage. Most popular AIF category in India.
Examples: Private Equity Funds, Real Estate Funds, Distressed Asset Funds, Credit Opportunity Funds
Category III AIF
Complex strategies — May use leverage and derivatives
Employs diverse or complex trading strategies. May use leverage including through investment in listed or unlisted derivatives. Highest risk category.
Examples: Hedge Funds, Long-Short Equity Funds, Market Neutral Funds, Multi-Strategy Funds
3. Who Can Invest in AIF?
✅
Eligible Investors
Resident Indians | NRIs | Foreign nationals | Companies | LLPs | Trusts | Family Offices — all with minimum Rs. 1 Crore investable surplus in this asset class and Aggressive risk profile
❌
Not Suitable For
Investors with less than Rs. 1 Crore investable surplus | Conservative / Moderate risk profile | Investors needing liquidity within 5 years | Investors who cannot afford total capital loss
⚠️ SEBI Mandatory Minimum — Rs. 1 Crore
As per SEBI (Alternative Investment Funds) Regulations 2012, the minimum investment in any AIF is Rs. 1 Crore (Rupees One Crore) per investor. This threshold is set by SEBI to ensure only sophisticated investors with high financial capacity and risk tolerance participate in AIFs. Employees / directors of an AIF may invest a minimum of Rs. 25 Lakhs.
4. AIF vs Mutual Fund vs PMS — Key Differences
| Parameter | Mutual Fund | PMS | AIF |
|---|
| Min. Investment | Rs. 500 (SIP) | Rs. 50 Lakhs | Rs. 1 Crore |
| Regulator | SEBI / AMFI | SEBI / APMI | SEBI |
| Liquidity | High (T+1/T+2) | Medium | Low (3-7 yr lock) |
| Investor Type | Retail / All | HNI (50L+) | Sophisticated (1Cr+) |
| Ownership | Units in pool | Direct securities | Units in pool |
| Transparency | Daily NAV | Monthly report | Quarterly report |
| Asset Classes | Listed stocks/bonds | Listed stocks | Unlisted, PE, RE, Debt |
| Risk Level | Low to Very High | High | Very High |
| SEBI Riskometer | ✅ Mandatory | Not applicable | Not applicable |
| Key Document | SID / KIM | Disclosure Document | PPM (Private Placement Memorandum) |
5. Key Risks in AIF — Mandatory Disclosure
Risk Disclosure — Per SEBI (AIF) Regulations 2012
- Illiquidity Risk: AIF investments are locked in for 3-7 years — you cannot exit before maturity in most cases
- Capital Loss Risk: Unlike bank FDs or MFs, AIF investments carry the risk of total capital loss — returns are NOT guaranteed
- Concentration Risk: AIF portfolios are concentrated — failure of even 1-2 investments can significantly impact returns
- Valuation Risk: Unlisted investments are valued periodically (not daily) — actual realisation value may differ from reported NAV
- Leverage Risk (Category III): Category III AIFs may use leverage/derivatives — amplifies both gains and losses
- Regulatory Risk: SEBI regulations for AIFs are evolving — changes may impact fund operations and investor returns
- Manager Risk: AIF performance is heavily dependent on the fund manager's skill and network — no guarantee of consistency
- Exit Risk: Depends on IPO market, secondary sale, or strategic buyer — uncertain exit timeline and valuation
- Currency Risk (for international AIFs): Funds investing overseas are subject to forex risk
6. Typical AIF Cost Structure
| Fee Type | Description & Typical Range |
|---|
| Management Fee | Annual fee on committed/drawn capital. Typically 1% to 2.5% per annum. Charged on drawn-down capital or total commitment depending on AIF structure. |
| Performance Fee (Carried Interest) | Share of profits above hurdle rate. Typically 15% to 20% carry above 8%-12% hurdle rate. Industry standard for PE/VC: 20% carry above 8% hurdle. |
| Setup / Structuring Fee | One-time fee at time of investment. Typically 0.5% to 2% of investment amount. |
| Exit Load | Some AIFs charge exit load on early redemption (if allowed). Can be 2% to 5% depending on exit timing. |
| Custodian / Admin Charges | Annual custody, administration, and compliance costs. Typically passed through to investors. |
| GST | 18% GST on management fee and performance fee. As per AMFI BPG 123/2025-26. |
Important: AIF fees are significantly higher than Mutual Fund TER. Always request the complete fee waterfall from the PPM before committing capital. The net return to investor = gross return minus all fees and taxes.
7. UPPSCALLE INVESTMENTS PVT LTD's Role as AIF Distributor
- UPPSCALLE INVESTMENTS PVT LTD acts as a distributor of AIF — we are NOT the AIF Manager or Investment Manager
- All investment decisions in AIF are taken by the respective SEBI-registered AIF Manager — not by UPPSCALLE INVESTMENTS PVT LTD
- UPPSCALLE INVESTMENTS PVT LTD receives a referral / distribution fee from AIF managers for investor onboarding — disclosed in PPM
- AIF investments are recommended ONLY after thorough risk profiling — exclusively to Aggressive profile investors
- Minimum investment horizon recommended: 5 years and above for any AIF investment
- AIF should constitute not more than 10-20% of an investor's overall portfolio — not a primary investment
- All AIF-related queries: [email protected] | +91 9825184365
8. AIF Funds Empanelled with UPPSCALLE INVESTMENTS PVT LTD
The following SEBI-registered Alternative Investment Funds are currently empanelled with UPPSCALLE INVESTMENTS PVT LTD.
Add AIF funds from the left panel
Verify AIF registration at sebi.gov.in → Registered Entities → Alternative Investment Funds. Always read the PPM (Private Placement Memorandum) before investing.
9. Before Investing in AIF — Your Checklist
- ✅ Read the complete Private Placement Memorandum (PPM) — mandatory per SEBI AIF Regulations
- ✅ Verify SEBI AIF registration at sebi.gov.in → Alternative Investment Funds
- ✅ Understand the complete fee structure — management fee, carry, setup fee, and GST
- ✅ Confirm you can commit capital for the full lock-in period (typically 3-7 years)
- ✅ Understand the investment strategy — what the AIF invests in, concentration level, geography
- ✅ Review the fund manager's track record across previous funds
- ✅ Ensure Rs. 1 Crore minimum is from long-term investable surplus — not emergency funds
- ✅ Understand the exit mechanism — IPO, secondary sale, buyback, or strategic sale
- ✅ Keep AIF as maximum 10-20% of your overall investment portfolio
- ✅ Understand the tax treatment — Category I & II: pass-through taxation | Category III: AIF level taxation
10. Tax Treatment of AIF Investments
📋
Category I & II AIF — Pass-Through
Tax is passed through to investors. Investor pays tax based on their own tax slab and holding period. AIF itself does not pay tax — income is deemed to be investor's income directly.
💰
Category III AIF — AIF Level Tax
Tax is paid at the AIF level (not pass-through). Short-term gains taxed at 15%, long-term gains at 10%. Returns are post-tax at AIF level — higher tax efficiency lost compared to Cat I & II.
Consult your CA: AIF taxation is complex and subject to changes in tax laws. Always consult a qualified Chartered Accountant before investing in AIF for personalised tax advice.
🔍 Verify AIF Registrations — Official Portals
Always verify AIF managers and distributors independently before committing capital.
SEBI — AIF Registrations
Verify SEBI registration, PPM filing, and compliance status of AIF managers
SEBI — AIF Circulars
All SEBI circulars and regulatory updates on Alternative Investment Funds
SEBI SCORES — Grievances
Lodge complaint against AIF manager or distributor if unresolved at firm level
SMART ODR — Disputes
Online dispute resolution for AIF-related investor disputes
Contact UPPSCALLE INVESTMENTS PVT LTD for AIF QueriesFor any queries regarding AIF investments, fund strategies, PPM documents, or to schedule a detailed discussion, contact us at
[email protected] or
+91 9825184365. We will provide complete information and the PPM free of charge before any investment commitment is made.
Last Updated: August 2026 | UPPSCALLE INVESTMENTS PVT LTD | 182598 | www.uppscalle.com | Regulatory basis: SEBI (Alternative Investment Funds) Regulations 2012 & amendments
