| Target Investors | Affluent investors seeking advanced yet tax-efficient strategies | First-time to long-term investors. | HNIs desiring personalised portfolio management. | Ultra-HNIs & institutions exploring non-traditional assets. |
| Minimum Investment | ₹10 Lakh (across schemes under a single SIF) excluding accredited investors (who have a specific Networth criteria) | ₹99 or even lower (SIP and lumpsum) | ₹50 Lakh | ₹1 Crore |
| Structure | Pooled, SEBI-regulated investment vehicle | Pooled, SEBI-regulated investment vehicle | Separately managed, direct stock ownership | Pooled, privately placed schemes |
| Usage of Derivatives | Allowed for Hedging and taking Naked short position up to 25% of the portfolio | Allowed for Hedging or taking Long positions only | Allowed for Hedging or taking Long positions only | Allowed |
| Strategies | Equity-oriented (3 strategies); Debt-oriented (2 strategies); Hybrid (2 strategies) | Equity, debt, hybrid, index-based, solution oriented, etc. | Customizable: thematic, concentrated, sectoral | Private equity, venture capital, hedge, real estate, special situations |
| Taxation at Investor level* | Similar to Mutual Funds (depending on asset class) | Tax efficient as per the asset class | Taxed to investor at each buy & sell of security | Nil |
| Taxation at Fund Level* | Nil as per Section 10 (23D) | Nil as per Section 10 (23D) | Nil | Cat III - Capital gains @12.5% + Business Income @ Maximum Marginal Rate |
| Liquidity | High to Low (depends on strategy) | High (open-ended) | Moderate (subject to exit load/notice period) | Low (typically closed-ended) |
| Leverage | Not Allowed | Not Allowed | Not Allowed | Gross exposure up to 200% |
| Suitability | Investors seeking greater flexibility than MFs with similar tax-efficiency | Beginners & long-term retail investors | HNIs seeking active and customized portfolio control | Sophisticated investors aiming for higher returns with higher risk appetite |
| Risk Profile | Conservative to High risk profile (depends on the strategy) | Conservative to High risk profile (depends on the category) | Higher risk profile | Highest risk profile |
| Regulatory Framework | Governed under the SEBI new asset class guidelines. | SEBI (Mutual Funds) Regulations 1996 | SEBI (Portfolio Managers) Regulations 1993 | SEBI (Alternative Investment Funds) Regulations 2012 |
Strategies
