SEBI introduces new rules for Accredited Investors

"SEBI Notifies Co-Investment Framework for AIFs — Major Shift for Accredited Investors." In a move to ease co-investments and improve transparency, SEBI has issued a circular (dated 9th Sept 2025) allowing Category I & II AIFs to launch Co-Investment Schemes (CIVs) within the AIF framework — instead of relying solely on Portfolio Managers. This is a critical structural reform — with implications for fund structuring, investor rights, and valuation oversight. Here are the highlights investors and fund managers should know: 🔹 Accredited investors can now co-invest within AIF structure under dedicated CIV schemes. 🔹 Each CIV scheme will have separate bank and demat accounts, and ring-fenced assets. 🔹 Co-investment by an investor across CIVs in a single investee company cannot exceed 3x of their primary AIF contribution (with some institutional exceptions). 🔹 Shelf Placement Memorandum is now mandatory before launch — standardised template here. 🔹 No borrowing or leverage permitted under CIV schemes. 🔹 Rights and returns to be shared pro-rata, with clear terms on carried interest. 🔹 Expenses to be shared proportionately between AIF scheme and CIV scheme based on investment ratio. 🔹 Additional implementation standards to be released by the SFA (Standard Setting Forum for AIFs) — will apply to all fund managers and trustees. Why this matters: This framework boosts transparency, accountability, and participation flexibility — while allowing co-investments without breaching direct investment restrictions. #SEBI #AIF #Valuation #CoInvestment #CIVScheme #RegisteredValuer #StartupFunding #PrivateCapital #InvestmentRegulations #FundStructure #Compliance

Recently, SEBI amended the AIF framework to permit AIFs to create Co-Investment Vehicle Schemes that would allow accredited investors to co-invest in the portfolio companies of the main AIF. The CIV Scheme route is in addition to the existing option for managers of AIFs to obtain a Co-Investment PMS Licence to facilitate co-investment. IFSCA has issued a parallel framework for co-investments by venture capital schemes and restricted schemes in IFSCs (by setting up Special Schemes), aligning with SEBI’s principles while tailoring compliance, disclosure, and governance to the IFSC ecosystem. Both regimes focus on mitigating conflicts of interest, enhancing transparency, and protecting investors by standardizing how co-investments are offered, allocated, documented, and exited. However, we take a close look in this update at the two new regimes and question if they could be improved in a few select aspects. Read the update here: https://lnkd.in/dfmpvu68 Vinod Joseph, Paridhi Jain #ELPinsights #IFSC #SEBI #investment #funds

📊 Poll Results: Test Your Private Equity Knowledge! In our last poll, we asked which performance metric is most commonly used as the headline figure for private equity funds. ✅ The correct answer is: IRR (Internal Rate of Return) 📈 While sophisticated investors always analyze a fund using a combination of metrics, IRR has long been the industry's headline standard. Its key advantage is that it accounts for the time value of money—measuring not just how much profit was generated, but also how quickly it was returned. This makes IRR the primary tool for comparing the performance of different funds. For a complete picture, it's always used alongside MOIC (to see total value) and DPI (to see cash distributions). Subscribe to our unique Private Equity Video Newsletter to keep you updated on recent happenings in private equity and an expert opinion on the deals, get it now for free! https://lnkd.in/giMtz-dN 👏 A big thank you to everyone who participated! A solid understanding of these metrics is fundamental to navigating the private equity world. #MinkLearning #PrivateEquity #InvestmentEducation #IRR #FundPerformance #MOIC #DPI

SEBI in its latest board meeting approved several amendments to enhance ease of doing business, expand participation of institutional investors, strengthen investor protection and institutionalize governance in market infrastructure institutions and market intermediaries. 𝐑𝐞𝐚𝐝 𝐭𝐡𝐞 𝐮𝐩𝐝𝐚𝐭𝐞 𝐛𝐞𝐥𝐨𝐰. K.C. Jacob; Shourya Tanay Srivastava; Prakshal Jain; Mridula Bhat #SEBIUpdates #EaseOfDoingBusiness #InvestorProtection #MarketRegulation #ELP

𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐨𝐟 𝐕𝐚𝐥𝐮𝐞 𝐨𝐟 𝐀𝐈𝐅 𝐔𝐧𝐢𝐭𝐬 𝐭𝐨 𝐃𝐞𝐩𝐨𝐬𝐢𝐭𝐨𝐫𝐢𝐞𝐬 SEBI has released a draft circular proposing new guidelines to enhance transparency and investor protection in the AIF ecosystem. Currently, Category I & II AIFs are required to undertake valuation every 6 months (extendable to 1 year with 75% investor approval) while Category III AIFs are to disclose NAV quarterly (closed-ended) or monthly (open-ended). Key Proposals: 1) AIFs/RTAs to upload NAV of ISINs of all AIF units on the depository system within 15 days of valuation 2) For existing schemes, latest NAV to be uploaded within 45 days from issuance of the circular 3) Trustees/sponsors must ensure reporting is covered in the Compliance Test Report (CTR) Stakeholders can submit views by October 9, 2025 through SEBI’s consultation link here - https://lnkd.in/de49qfNd At Treelife, we work closely with AIFs on compliance, structuring, and reporting. If you’d like to assess how these proposals may impact your fund, let’s connect at priya.k@treelife.in! Jitesh Agarwal Dhairya Chaniyara

Explainer on Accredited Investors Sharing a blog that breaks down what it means to be an Accredited Investor – the benefits, eligibility, and procedure for certification. Surprisingly, though the concept has been around since 2021, not many investors are aware of it. Perhaps the fee has kept it low-profile, but it’s definitely worth considering. Why? Because it opens doors to AIFs and PMS investments without the ₹1 Cr/₹50 Lakh minimum thresholds, giving investors far more flexibility and access to opportunities. In my view, this is an option more investors should evaluate as they look at diversifying their portfolios. #AccreditedInvestor #WealthManagement #Investing #FinacrestWealth

SEBI recently permitted a co-investment framework for AIFs, thereby enabling what is common in many jurisdictions, and is already being practised in case of portfolio management services. The so-called Co-investment Vehicle (CIV - we wonder whether, given that there is no pooling of investees, is at all a vehicle of diversified investing; it is more a mode of aggregation of investors, than investees) comes with several restraints - prohibition of leverage, a limit of 3X on the proportional investment of the investor in the AIF, etc. Our colleagues Payal Agarwal and Simrat Singh discuss the new phenomenon: https://lnkd.in/gkxabfY8

SEBI’s Specialised Investment Funds (SIFs) introduce a new investment category bridging the gap between traditional mutual funds and high-ticket Portfolio Management Services (PMS). What makes SIFs stand out - - SIFs allow strategies such as long-short equity, hybrid/debt-oriented approaches and unhedged derivatives exposure (up to 25%), offering greater flexibility than regular mutual funds. - Despite their sophisticated strategies, SIFs operate under SEBI’s regulations, ensuring clarity about risks, disclosures, governance. - SIFs follow tax norms similar to mutual funds, with gains taxed at the investor level depending on holding periods, rather than more opaque or bespoke tax treatments. An important detail is the entry point: investors need to commit Rs. 10 lakh (across all SIF strategies under the same AMC on your PAN) to access this. For anyone who has been considering PMS or AIF but feels the scale or complexity is too much, SIFs might serve as a middle ground worth exploring. Investments in SIFs carry risks It is essential to read all related documents carefully. Consult a financial advisor to assess suitability based on your individual financial goals and risk tolerance. #specialisedinvestmentfunds #mutualfunds #finance

SIFs are designed for investors who seek a higher degree of customization and sophistication than traditional mutual funds allow, while still valuing the transparency, governance, and investor-first ethos that define regulated investment products. This new category attempts to bridge the gap between mutual funds and portfolio management services. It offers the flexibility of bespoke portfolio strategies with a robust regulatory framework, ensuring that innovation doesn't come at the cost of discipline or investor protection. Photo:Magnum SIF

𝗛𝗼𝘄 𝗗𝗼 𝗦𝗘𝗕𝗜'𝘀 𝗡𝗲𝘄 𝗔𝗜𝗙 𝗥𝘂𝗹𝗲𝘀 𝗔𝗳𝗳𝗲𝗰𝘁 𝗬𝗼𝘂𝗿 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀? SEBI's 2025 reforms bring significant changes to Alternative Investment Funds (AIFs), impacting your investments directly! 💸 What's New? - Co-Investment Windows: Accredited investors can now invest alongside Category I & II funds in specific unlisted deals under separate co-investment schemes. - Angel Fund Overhaul: Clearer regulatory identity, stricter timelines, and accredited investor requirements. - CIV Schemes: Ring-fenced assets and fair terms ensure co-investors don't get preferential treatment. What It Means for You - More Access for Big-Ticket Investors: Increased opportunities, but more paperwork. - Improved Governance: Reduced risk of fund misuse. - Professionalized Angel Investing: Tougher for casual investors. Take Action - Check Your Fund Docs: - Who's the custodian? - What are the co-invest terms? - Do you qualify under new Angel Fund rules? - Get Help: Comment below, and we'll guide you through the new rules! Stay ahead of the curve and navigate these changes with confidence. Let's discuss how these reforms impact your investments! 💬 #SEBI #AIF #AlternativeInvestmentFunds #InvestorAlert #FinancialRegulations #AngelInvesting #InvestmentOpportunities #InvestmentNews #FinancialNews #InvestorEducation #AIFReforms #SEBINews #InvestmentUpdates #FinancialUpdates