NISM Series XV : Research Analyst Certification Exam Notes
Page 18 Of 62
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Private equity is a term used to define funding available to companies in the early stages of growth, expansion or buy-outs. Investee companies may be privately held or publicly traded companies. The term private equity includes venture capital firms. The money in the fund is contributed by investors, called limited partners, and invested and managed by the general partner(s).
Hedge Funds are investment vehicles that pools capital from a number of investors and invests that across the assets, across the products and across the geographies.These fund managers generally have very wide mandate to generate return on the invested capital.
They hunt for opportunities to make money for their investors wherever possible. In that sense, actually, term hedge fund is misnomer as these funds may not necessarily be hedged.
Alternative Investment Funds - Any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP) which are not presently covered by any Regulation of SEBI governing fund management (like, Regulations governing Mutual Fund or Collective Investment Scheme) nor coming under the direct regulation of any other sectoral regulators in India -IRDAI, PFRDA, RBI etc.
Category I AIFs invest in start-up or early-stage ventures / social ventures / SMEs / infrastructure or other areas which the government consider as socially / economically desirable. These include venture capital funds (including angel funds), SME Funds, social venture funds, infrastructure funds, etc.
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