About AIF
An AIF is a privately pooled investment vehicle regulated by SEBI. It is most commonly set up as a trust, and may also be a company or an LLP. SEBI classifies AIFs into three categories, and choosing the right one is the first structuring decision.
- Category I
- Funds investing in start-ups, early-stage ventures, SMEs, infrastructure and other sectors considered socially or economically desirable, such as venture capital, angel and social venture funds.
- Category II
- Funds that do not fit Category I or III and do not use leverage beyond day-to-day operational needs, such as private equity and debt funds.
- Category III
- Funds that use diverse or complex trading strategies and may use leverage, such as hedge funds.
How we help. We advise on category and structure, sponsor and manager arrangements, fund economics and terms, and draft the full document suite. We take the registration and scheme launch through SEBI and support you through post-incorporation compliance.
Explore AIF types
Category I
Start-ups, SMEs, infrastructure and social impact
- Venture Capital Fund (VCF)Category I AIF investing in early-stage, high-growth businesses.
- Angel FundA venture capital sub-category built for angel investor networks.
- SME FundCategory I AIF focused on small and medium enterprises.
- Social Venture FundCategory I AIF investing for measurable social impact.
- Infrastructure FundCategory I AIF investing in infrastructure and related sectors.
- Special Situation FundAIF strategy for stressed assets and special situations.
Category II
Private equity, debt and real estate
Category III
Hedge, long-only and fund of funds
Category I
Start-ups, SMEs, infrastructure and social impact
Venture Capital Fund (VCF)
Category I AIF investing in early-stage, high-growth businesses.
Angel Fund
A venture capital sub-category built for angel investor networks.
SME Fund
Category I AIF focused on small and medium enterprises.
Social Venture Fund
Category I AIF investing for measurable social impact.
Infrastructure Fund
Category I AIF investing in infrastructure and related sectors.
Special Situation Fund
AIF strategy for stressed assets and special situations.
Category II
Private equity, debt and real estate
Private Equity (PE) Fund
Category II AIF for private equity investment.
Debt Fund
Category II AIF investing in debt and debt-like instruments.
Fund of Funds (FoF)
AIF that invests in other AIFs, in Category II or Category III.
Real Estate Fund
Category II AIF investing in real estate assets and projects.
Category III
Hedge, long-only and fund of funds
Hedge Fund
Category III AIF using complex or leveraged trading strategies.
Long-Only Fund
Category III AIF taking long positions in listed securities.
Fund of Funds (FoF)
A fund of funds can also be set up in Category III.
Large Value Fund (LVF)
- Accredited investors only
- Minimum ₹25 crore per investor
- Relaxed compliance regime
Overlay on Category I, II and III.
What our AIF work covers
An AIF launch is a chain of legal decisions, and each one limits the next. These are the stages we advise on.
- Fund formation and structuringChoice of vehicle (trust, LLP or company), the roles of sponsor and manager, governance, and the points where the structure meets tax and cross-border advice. Tax and offshore advice come from your tax advisers and, where needed, foreign counsel; we work with them on the legal side.
- Fund documentationThe placement memorandum (PPM), the trust deed or LLP agreement, the investment management agreement and the contribution and investor documents. Each does a different job, and they must agree with one another, especially on fees and economics.
- Investor terms and negotiationWhere relevant: commitments and drawdowns, distributions, carried interest, hurdle and clawback, conflicts, side letters and governance rights. Preferential terms must stay within the limits SEBI sets.
- Registration and scheme launchEligibility review, the application and the PPM, which is filed through a SEBI-registered merchant banker, and responses to SEBI’s queries. We depend on you for accurate sponsor and manager information. SEBI decides the application and its timing, so we can estimate but cannot promise a date.
- Post-launch legal supportAmendments to documents, changes in the manager or in control, investor consents, support with reporting, inspections, extension of the fund term and winding-up, within the scope we agree.
Who does what in a fund launch
- Finleaf Legal. Legal structuring advice, drafting and negotiation support, the SEBI application and responses, and post-launch legal support within the agreed scope.
- Sponsor and manager. Investment strategy, commercial terms, fee and governance decisions, and the accuracy of the information given to us and to SEBI.
- Merchant banker. Filing the PPM with SEBI and the due diligence certificate the regulations require.
- Tax and accounting advisers. Tax structuring, audit, valuation and fund accounting.
- Trustee, custodian and other service providers. Appointed as the structure and the regulations require. We help document the appointments.
We do not raise capital or source investors, and we do not guarantee registration or a timeline. The scope of each engagement is set out in the engagement letter.
How we typically help
This is an illustrative example of how we approach a common situation. It is not a client case study.
A first-time manager launching a Category II AIF
We help the sponsor settle the fund’s structure, terms and governance, prepare the private placement memorandum and fund documents together, take the registration through SEBI, and prepare the manager for investor onboarding and ongoing reporting.
Who we work with
- First-time fund sponsors and managers launching their first vehicle and needing a clear, well-documented path to registration.
- Established managers adding a new category, strategy or product to an existing platform.
- Family offices and promoter groups structuring investment vehicles for their own and co-investor capital.
- Managers and investors looking at GIFT City or other cross-border structures.
What to expect when you work with us
- Initial conversationYou tell us about your objectives, your investors and your timeline. We tell you what is feasible and what the regulator will expect.
- Scope and proposalWe set out the workstreams, deliverables and fees in a written proposal, so that you know what is included before you commit.
- Kick-offWe agree on the timeline, the information we need from you and the people on each side who will be responsible.
- DeliveryStructuring, documentation and regulatory preparation move forward together, and we keep you updated at each step.
- Filing and follow-throughWe submit the application, manage regulatory queries and keep you informed until the process is complete.
- Launch handoverWe walk you through post-registration obligations and the compliance calendar, so that you can operate with confidence.
Why clients choose Finleaf
- Fewer advisers to manage. One team and one point of accountability.
- Fewer surprises. Defined scope, defined deliverables and clear next steps.
- Cleaner regulatory journeys. Structures and documents prepared with the approval process in mind from day one.
- Coordinated workstreams. Where the engagement requires it, legal documentation and regulatory preparation can be planned in parallel, subject to dependencies and regulator timelines.
- Continuity. The same team supports you after registration.
Our commitments
- Accuracy. We work from current regulations and circulars, and we tell you where the position is unsettled.
- Candour. We tell you what is feasible, what is risky and what we would do in your position.
- Confidentiality. Your plans, structures and investor details stay protected.
- Accountability. We own the outcome of our workstream and report progress clearly.
Frequently asked questions
Which AIF category is right for my strategy?
It depends on what the fund invests in, whether it will use leverage, and who the investors are. We cover this in our first conversation and set out our recommendation in the structuring note.
How long does it take to launch?
The timeline depends on the product, how ready your documents and information are, and the regulator’s review. We give a realistic estimate in the proposal and update it as the work progresses.
Do you handle the entire process or only part of it?
Both are possible. Most clients engage us across structuring, documentation, regulatory execution and launch readiness, but you can engage us for a specific stage.
Do you guarantee regulatory approval?
No adviser can. Approval rests with the regulator. What we do is prepare your structure, documents and filings to the standard the process demands and manage the process closely.
Do you support us after registration?
Yes. Our Launch Readiness workstream and post-incorporation support help you onboard investors and meet your ongoing obligations.
Can you work alongside our other advisers?
Yes. We regularly coordinate with merchant bankers, tax advisers, auditors, trustees and custodians, and we can work with the advisers you already have.
Do you manage money or distribute investment products?
No. Finleaf provides legal and regulatory advisory services. We do not manage funds or distribute investment products.
How do I get started?
Share a short brief about your fund or offering. We will revert to discuss scope and next steps.
Speak to Finleaf
Planning a fund, a PMS or a listing? Let’s structure it properly from the start.