SEBI has introduced a new category of Alternative Investment Fund (AIF) products that can be offered exclusively to accredited investors, following the notification of the SEBI (AIF) (Third Amendment) Regulations, 2025 on 18 November 2025.
The move streamlines compliance for funds that cater to sophisticated, high-net-worth investors and brings multiple structures under a unified framework.
New ‘Accredited Investors Only’ Category
A fresh class titled “Accredited Investors Only Fund” has been added to the AIF rulebook.
Under this category, all investors must be accredited, except for the AIF’s manager, sponsor, directors, or employees who may also invest.
The new segment also subsumes the existing Large Value Funds for Accredited Investors (LVFs), combining both into a single structure. SEBI has allowed current AIFs and schemes to migrate to this category once they meet the eligibility conditions.
Lower Minimum Corpus for LVFs
The regulator has reduced the minimum corpus requirement for LVFs from ₹70 crore to ₹25 crore.
This relaxation is expected to help fund managers launch accredited-focused schemes with smaller capital pools, providing more flexibility and faster time-to-market.
No Investment Concentration Limits
A key change is the removal of concentration norms for accredited-only funds.
Investors in this category will not face any cap on exposure to a single portfolio company—offering greater leeway for concentrated bets, bespoke deals, or high-value investments.
Shift in Governance and Trustee Roles
For accredited-only AIFs, responsibilities typically handled by trustees will now fall on the fund manager, simplifying oversight structures.
SEBI has also exempted LVFs from the governance requirements under Regulation 20(8), reducing compliance load and operational paperwork.
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