Alternative Investment Fund (AIF) is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing them in accordance with a defined policy. AIF will not undertake borrowing activities other than to meet day-to-day operational requirements. The Centre plans to invest INR10,000 Crore in the fund, while INR 15,000 Crore will be pooled from domestic institutions such as LIC and SBI in a phased manner. Apart from INR 25,000 Crores from Centre, SBI and LIC, the sovereign and pension funds have also agreed to invest in the market. According to regulation, a Bank can invest up to 10% of the corpus of an AIF.For the first AIF under the special window, SBICAP Ventures has been appointed to be the Investment Manager. The fund will be managed by SBI Capital and target 4.58 lakh residential units pending in 1,600 housing projects. Funds from AIF will be released in tranches via an Escrow Account depending on the completion of the approved phase. After assessing the financial position of various projects, the investment manager would provide funds enabling stalled projects to complete construction and deliver homes to buyers. The funds will not get released to Developers in one go. Instead, the allocated fund will get transferred in a special “Escrow Account” for that particular project and will be disbursed in accordance with the progress in construction. “Construction-linked funding will ensure that the project is completed well within time. The funds in escrow account cannot be touched even by Banks to settle pending dues of a Builder.
Mr. Amit Kr. Kedia is a practicing Chartered Accountant based out of Jaipur. Through his more than twelve years of career, he has become recognized for his contribution and expertise as a knowledgeable professional, advisor and consultant in the field of financial consultancy (RERA, Valuation, Project Consulting ,Corporate Finance, Mergers and Acquisition & Corporate Restructuring Advisory) and tax advisory. With a core expertise in Finance specifically fund raising across various products he has been serving entrepreneurs and various corporate. He had been convener in various programs of The Institute of Chartered Accountants of India, Tax Consultants Associations & ‘Co-Convener’ in committee of the Tax Consultants Associations of Jaipur.