More Stories

Informist, Wednesday, Jun. 18, 2025

--SEBI allows category 1, 2 AIFs to offer co-investment schemes

NEW DELHI – In order to improve ease of doing business, the board of the Securities and Exchange Board of India Wednesday allowed category I and category II alternative investment funds to offer co-investment schemes. "This will further facilitate AIFs and investors to co-invest and will support capital formation in unlisted companies through AIFs," the market regulator said.

Co-investment means investment made by a manager or sponsor of the alternative investment fund or by investor of category I and II alternative investment funds in unlisted investee companies, where such a category I or category II alternative investment funds make investment.

The SEBI board said that a working group review found certain operational issues with the present norm, under which co-investment for alternative investment fund investors is facilitated through co-investment portfolio managers. Thus, the working group recommended a route for co-investment within the alternate investment fund structure, it said.

The new policy will allow category I and II alternative investment funds to facilitate co-investment to accredited investors through co-investment scheme within alternative investment fund regulations, in addition to the existing option for co-investment available through the portfolio managers route, SEBI said. 

Under the co-investment scheme introduced under alternative investment fund regulations, co-investment scheme will mean a scheme of a category I or category II alternative investment fund, which facilitates co-investment to accredited investors of a particular scheme of an alternative investment fund, in unlisted securities of an investee company where the scheme of the alternative investment fund is making investment or has invested, the regulator said.

"A separate CIV (co-investment) scheme shall be launched for each co-investment in an investee company subject to safeguards to ensure that the scheme is used only for bona fide purposes," SEBI said. Moreover, some regulatory requirements applicable to other alternative investment fund schemes will be relaxed for co-investment schemes under the new norm.  End

Reported by Pratiksha

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.