| Minimum Investment | Generally ₹1 crore per investor, with regulatory exceptions for certain eligible investors and schemes. | Generally ₹50 lakh per client, subject to applicable regulatory exemptions. | Some schemes allow investments starting from ₹100 or ₹500, depending on the fund and investment mode. | No fixed regulatory portfolio minimum; investors need sufficient funds to purchase their chosen shares. |
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| Investor Profile | Eligible HNIs, UHNIs, family offices and institutions comfortable with complex strategies and limited liquidity. | Typically HNIs seeking professionally managed portfolios with potential customisation. | Retail, HNI and institutional investors seeking professionally managed investment options. | Investors comfortable researching companies, selecting stocks and managing their own portfolios. |
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| Investment Opportunities | Private equity, venture capital, private credit, listed securities and other alternative assets, depending on the AIF category. | Typically listed equities and other permitted securities based on the portfolio mandate. | Equity, debt, money market instruments and other permitted assets depending on the scheme. | Direct investment in individual listed companies selected by the investor. |
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| Investment Strategies | Private equity, long-only, long-short, venture capital and private credit strategies, depending on the fund category. | Discretionary, non-discretionary or advisory portfolio management under an agreed investment mandate. | Active equity, debt, hybrid, index and other SEBI-permitted investment strategies. | Self-directed value, growth, dividend, momentum or trading strategies. |
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| Asset Ownership | Investors generally own units in the AIF scheme rather than directly holding its underlying assets. | Client securities are generally held in accounts attributable to the individual investor. | Investors own units representing their interest in the mutual fund scheme. | Investors directly own the shares held in their demat accounts. |
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| Investment Structure | Privately pooled investment vehicle operating under a defined strategy, commonly structured as a trust. | Separately managed client portfolios operated under a portfolio management agreement. | Pooled investment scheme managed by an asset management company (AMC). | Self-managed investment in individual securities through trading and demat accounts. |
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| Returns and Performance | Returns depend on the AIF strategy and underlying assets; may be measured using CAGR, IRR or NAV-based performance, as applicable. | Returns depend on the manager's investment decisions and client portfolio; performance is assessed against relevant benchmarks. | Returns depend on scheme performance, generally measured using NAV-based returns and compared with benchmarks. | Returns arise from share price appreciation and dividends, depending on individual stock performance. |
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| Risk Profile | May involve illiquidity, concentrated holdings, valuation uncertainty, permitted leverage and potential capital loss. | Exposed to market volatility, portfolio concentration, manager decisions and strategy-specific risks. | Risks vary by scheme and may include market, credit, interest-rate and liquidity risks. | Exposed to individual company risks, market volatility and portfolio concentration. |
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| Liquidity and Exit | Category I and II AIFs are closed-ended with a minimum three-year tenure. Category III AIFs may be open-ended or closed-ended. | Withdrawals depend on the portfolio management agreement, notice periods, asset liquidity and exit charges. | Open-ended schemes generally allow redemption on business days, while closed-ended schemes have restrictions. | Listed shares can generally be sold during market hours, subject to trading availability and liquidity. |
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| Fees and Expenses | May include management fees, performance fees, operating expenses and other charges disclosed in the PPM. | May include fixed management fees, performance-based fees, transaction costs and other agreed expenses. | Investors bear the scheme's expense ratio, applicable exit loads and other relevant charges. | Typically incurs brokerage, securities transaction tax and other transaction charges, without an external fund management fee for self-directed investing. |
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| Taxation | Category I and II AIFs generally have pass-through treatment for eligible non-business income. Category III treatment depends on the fund structure and applicable tax provisions. | Tax generally arises in the investor's hands based on transactions, income type and applicable tax rules. | Investors are generally taxed on taxable distributions and realised capital gains under applicable rules. | Investors are generally taxed on taxable dividends and realised capital gains under applicable rules. |
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| Portfolio Customisation | Limited individual customisation because investors participate in a common fund strategy. | Customisation may be available based on the investor's objectives, risk profile and agreed mandate. | No investor-specific customisation within the same scheme. | High flexibility; investors independently choose securities, allocations and transaction timing. |
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| Regulatory Framework | Regulated by SEBI under the Alternative Investment Funds Regulations, 2012, as amended. | Regulated by SEBI under the Portfolio Managers Regulations, 2020, as amended. | Regulated by SEBI under the Mutual Funds Regulations and applicable regulatory directions. | Governed by SEBI securities market regulations, stock exchange rules and applicable securities laws. |
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