Alternative Investment Funds are a class of investment entities that are not covered under the usual SEBI regulatory framework for investment institutions. AIFs refers to any privately pooled investment fund - a trust or a company or a body corporate or an LLP (Limited Liability Partnership) which are not presently covered by any Regulation of RBI, SEBI, IRDA and PFRDA. They may be foreign or Indian.
A notable general feature of AIFs is that they are tailor made investment arrangements like Private Equities that aims to utilize investment opportunities. AIFs are thus private investment entities.
Thus, AIFs includes Private Equities, Venture Capital Fund, Hedge funds, Commodity funds, Debt Funds, infrastructure funds, etc. Most of these investment entities are owned by big corporate houses or wealthy individuals. Private Equities like Blackstone and KKR (Kohlberg Kravis Roberts) are examples for AIFs. Several multinational banks have also AIFs. Venture Capital Funds and Angel Investors are also categorized as AIFs.