India has been trying to beef up its alternative assets industry for some time now. The biggest move in this direction came three years ago when it introduced a new class of vehicle, the alternative investment fund (AIF) . It now has 158 of these, and with more foreign money coming in, it’s expanding.
Data released by the Securities and Exchange Board of India (SEBI) show that of all AIFs to be registered since August 2012, 33 came in for approval in the first half of this year.
The classification encompasses hedge funds, real estate funds, and private equity funds. The latest bunch to get the SEBI nod include HDFC Capital Affordable Real Estate Fund, Unicorn India Venture Trust, and Blume Ventures India Fund.
The funds have been increasingly active too. According VC Circle, AIF invested more than 90 billion rupees ($1.3 billion) in the first quarter, compared with 70 billion rupees the previous three months.
What’s more these funds have also started to welcome in foreign cash. Last month the Union Cabinet cleared proposal for foreign investment in AIFs. Before this AIFs had been restricted to India investor only, with foreign commitments being approved by the Foreign Investment Promotion Board.
Many in investor community would agree India’s regulators still have some way to go, but the success of AIFs, and the most recent rule change, indicates that they are listening.
Photo: Gopal Vijayaraghavan