An Alternative Investment Fund (AIF) is a privately pooled investment vehicle – set up as Trust, Company, Limited Liability Partnership (LLP) or a Body Corporate – collecting funds from investors of both, Indian & Foreign origin. In India, AIFs are regulated by SEBI & covered under Securities Exchange Board of India (Alternative Investment Funds) Regulations, 2012. We act as Trustee for AIFs set up as a Trust.
AIFs in India have opened a new avenue for Investors, of Indian & Foreign origin, providing diverse investment options in contrast to conventional modes provided by portfolio management services or mutual funds. In the past decade, more specifically after the release of SEBI Regulations for AIFs in India, AIFs have gained huge popularity amongst investors, the likes of which encompass Indian & Foreign corporates, PIOs, NRIs, OCIs, HNIs, etc., envisaging India as a golden investment opportunity. The fact that registered AIFs in India raised INR 212,979.40 Crores on a net cumulative basis till December 31, 2020, posits the preference avid Investors have for Alternative Investment Funds.
What is a Trust?
A trust is a relationship in which:
A person or entity (the Trustee) holds legal title to certain property (the Trust Property) but is bound by a fiduciary duty to exercise that legal control for the benefit of one or more individuals or organizations (the Beneficiary), who hold ‘beneficial’ title. Such beneficiaries may be limited to the family members under a family trust / private trust. A trust is usually governed by the terms of the executed trust instrument (the Trust Deed) and the applicable law of the land. The entity (one or more individuals, a partnership, or a corporation) that creates a trust is called the Grantor/Settlor.
Role of Corporate Trustee in Private Trust
- The role of a corporate trustee in a private trust is to act as a professional entity responsible for managing and administering the trust on behalf of the beneficiaries. It is advisable to opt for corporate trustee for family trust as it provide benefits of corporate with long term sustainability and corporate governance. When selecting a corporate trustee, consider factors such as their reputation, financial stability, range of services offered, fee structure, and communication and responsiveness.