The Securities and Exchange Board of India on 22nd November 2021 has issued clarification regarding amendment to SEBI (Alternative Investment Funds) Regulation 2021.The amendment allows Category III AIFs, including any large value funds for accredited investors of Category III AIFs, to calculate the concentration norm based on Net Asset Value (NAV) of the fund for investment in listed equity of an investee company.
Regulation 2(1) (fa) has been inserted in AIF Regulations as under –
“’ 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.
Therefore, in this regard, it is specified that the requirement of appointment of custodian, as provided under Regulation 20(11)of AIF Regulations, shall be applicable if the sum of corpus of the AIF and the value of the Co-investment managed by the Manager of the AIF as Co-investment Portfolio Manager is more than five hundred crore rupees.
