The Securities and Exchange Board of India vide its notification dated 9th November 2021 has published the SEBI (Alternative Investment Funds) (Fifth Amendment) Regulations, 2021 which shall come into force from 30th December 2021.
Through this amendment the term “Co-investment “under section 2 has been defined as follows:
Co-investment” means investment made by a Manager or Sponsor or investor of Category I and II Alternative Investment Fund(s) in investee companies where such Category I or Category II Alternative Investment Fund(s) make investment:
Provided that Co-investment by investors of Alternative Investment Fund shall be through a Co-investment Portfolio Manager as specified under the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020;
Further regulation 15 which deals with general investment conditions in which the Investments by all categories of Alternative Investment Funds shall be subject to the following conditions:
The terms of Co-investment in an investee company by a Manager or Sponsor or co-investor, shall not be more favorable than the terms of investment of the Alternative Investment Fund:
Provided that the terms of exit from the Co-investment in an investee company including the timing of exit shall be identical to the terms applicable to that of exit of the Alternative Investment Fund:
Provided further that the above proviso shall be applicable only for co-investment made from the date of coming into force of this regulation.
