Altenative Investment Funds - FAQ

An Alternative Investment Fund (AIF) stands as a discrete investment vehicle forged within India. Tailored for sophisticated investors, both domestic and international, it serves as a clandestine reservoir, gathering financial resources and channeling them strategically in alignment with a meticulously crafted investment policy. The ultimate aim is to yield lucrative returns for its discerning group of investors.

Alternative Investment Funds (AIFs) offer a spectrum of strategic avenues, with applicants vying for registration falling into distinct categories:

• Category I AIFs: These entities focus on investments in socially and economically advantageous sectors, such as Venture Capital funds (including Angel Funds), SME Funds, Social Venture Funds, and Infrastructure funds endorsed by governmental or regulatory bodies.
• Category II AIFs: Encompassing a diverse array, Category II AIFs delve into realms like real estate funds, private equity funds (PE funds), and funds specializing in distressed assets, exhibiting a versatile approach to investment.
• Category III AIFs: Pioneering multi-asset class strategies, Category III AIFs employ a spectrum of investing and trading strategies in line with their articulated investment policy. These funds may also venture into leveraging within the prescribed limits set by SEBI. For example, Monarch AIF adeptly manages a Category III AIF, strategically navigating investments in listed equity. 

AIF management services can only be offered by SEBI-registered entities under the SEBI (Alternative Investment Funds) Regulations of 2012.

The statutory minimum investment stands at Rs 1,00,00,000/- (Rupees One Crore). Additional investments can be injected in increments of Rs. 1,00,000/- on any stipulated dealing date outlined in the offer document. However, should the investor be classified as an employee or director of the AIF or the Manager, the minimum investment bar is set at 25,00,000/- (Rupees Twenty-Five Lakh).

In contrast, no upper ceiling on investments exists within an AIF. The dimensions of the fund and the inflow of subscriptions (for closed-ended funds) dictate the pinnacle of permissible investment, reflecting a dynamic landscape responsive to the fund's size and market interest.

In accordance with SEBI regulations, it is imperative to emphasize that we cannot assure specific rates of return. Nevertheless, the primary investment objective of any AIF Manager is to consistently surpass the performance benchmarks, exemplified by indices such as NIFTY 500 TRI. This commitment underscores our dedication to achieving superior financial outcomes while adhering to regulatory standards.

Our funds are structured as closed-ended vehicles, featuring an initial lock-in period of 18 months and an overall term of three years. The extension of this term by an additional two years is contingent upon obtaining prior consent from a two-thirds majority of contributors. This framework aligns with our commitment to transparency and ensures the flexibility required for strategic decision-making in the best interest of our investors.

The Net Asset Value (NAV) is computed on a monthly basis. Our Fund Management team is committed to transparency and responsiveness, providing investors with comprehensive information upon request. This includes detailed insights into asset allocation, return attribution, top holdings, and liquidity. This practice reflects our dedication to fostering a clear and communicative relationship with our valued investors.

Tax obligations are settled at the fund level, ensuring returns to clients are post-tax. Profits within the AIF are subjected to prevailing capital gains tax rates for equity and market-linked instruments. For income stemming from other sources like interest, dividends, processing fees, etc., taxation is levied at Maximum Marginal Rates. As a prudent measure, we strongly advise consulting with your tax consultant before considering an investment in the AIF, ensuring alignment with your individual tax considerations and objectives.

Monarch AIF’s fee structure includes:

• No set-up fee
• No exit load (though there is an 18-month lock-in period)
• Operating expenses not exceeding 0.50% p.a. of net asset value
• Fixed management fee charged annually
• Performance fee, charged only if the hurdle rate is crossed and billed annually 

Any sophisticated investor, whether Indian, foreign, or non-resident Indian, is eligible to invest in an AIF, contingent upon possessing the requisite funds for investment. Eligible investor categories encompass Resident Individuals, Hindu Undivided Families (HUF), Body Corporates (Private/Public), Trusts, Partnership Firms, and other qualified entities. This inclusive framework underscores our commitment to providing investment opportunities to a diverse range of discerning investors.

Certainly, the Fund is open to Joint Contributors for investments, with a minimum threshold of Rs. 1,00,00,000/- (Rupees One Crore). Joint Contributors may consist of an investor and their spouse, an investor and their parent, and/or an investor and their daughter/son. However, it's important to note that no more than two persons can jointly contribute to the Fund.

For any inquiries specific to the fund, please feel free to contact us at monarchaif@mnclgroup.com. We are dedicated to assisting you on your investment journey and addressing any questions you may have.