Best AIFs in India (2026): top Category I, II and III funds

Short answer: the best AIF in India depends on the job you need the money to do. For long-dated growth, look at Category I venture funds; for private equity or private-credit income, Category II; for listed markets, Category III, split into long-only funds that only buy and long-short funds that can also bet against stocks. Our shortlist of open funds in each category is below.

By the PMS AIF World research desk. Updated 1 October 2026. Availability checked against AMC data for September 2026.

Best Category I AIFs: venture, angel and early-stage

Category I is patience capital. You are not buying one company; you are buying a basket of young businesses where most will stall and one or two winners are expected to pay for everything else. That shape changes what “best” means.

A strong Category I fund is not the one with the most exciting pitch deck. It is the one that can get into rounds other investors cannot, keeps money in reserve to back its winners in later rounds, and is honest about how long the wait will be. Expect little or nothing back for the first several years.

Category I AIF managers currently raising include 35North Ventures, Aikyam Capital Management, Alpha AIFs, Beyondseed India, Equentis Wealth Advisory Services, Equirus Wealth, Getfive Assets Advisors, Lead Invest, Merisis Venture Partners, Morphosis Venture Advisors and Rockstud Capital.

Top 3 Category I AIFs

India Discovery Fund II35North VenturesGrowth capital for tech-led, asset-light Indian start-ups, from a team now on its second fund.Explore fund
Equirus InnovateX FundEquirus WealthVenture fund from the Equirus group aimed at innovation-led early-stage companies.Explore fund
Rockstud Capital Investment Fund IIRockstud CapitalA second fund, which means there is a Fund I portfolio you can examine before committing.Explore fund

More venture and angel AIFs are open for subscription this month. Our specialists can help you find the one that fits your horizon. Book a call

How we analyse Category I AIFs: IRR, MOIC, DPI, TVPI and RVPI

Venture and angel funds report estimated values for years before they return any cash. Our job for investors is to separate what has been realised from what has only been estimated, and what the fund earned from what you actually keep.

Every Category I manager we cover goes through the same measures, always on net figures and always against funds that started investing in the same year.

Metric	What it tells you	How we use it
Gross vs net returns	Gross: what the portfolio earned Net: what reaches you after management fees, carry and fund expenses	Compared only net to net A wide gap = fees taking a large share of the outcome
IRR (internal rate of return)	Annualised return Accounts for exactly when each rupee went in and came out	Read with caution in early years Boosted by quick early exits and delayed capital calls Never ranked alone or across funds of different ages
MOIC (multiple on invested capital)	Total value ÷ capital invested (e.g. 2.5x) Ignores time	Shows how much money was made, which IRR can hide Checked deal by deal: many winners or one outlier?
TVPI (total value to paid-in)	(Cash distributed + remaining NAV) ÷ capital paid in	Fund-level, net-to-investor MOIC Our headline measure of value created so far, realised or not
DPI (distributions to paid-in)	Cash actually returned ÷ capital paid in	The one number that can’t be revised later Low DPI is normal in the first 5–6 years Near-zero DPI well past that gets hard questions
RVPI (residual value to paid-in)	Remaining NAV ÷ capital paid in TVPI = DPI + RVPI	The part of value that is still an estimate Should shift into DPI over the fund’s life If it doesn’t, exits aren’t happening
PME (public market equivalent)	Fund’s cash flows vs the same amounts, on the same dates, in an index (e.g. BSE 500 TRI)	Answers: was the lock-in worth it? KS-PME above 1 = beat the listed market, timing-adjusted
Vintage-year quartile	Rank among funds that started investing in the same year	Launch conditions drive returns heavily So we benchmark only within a vintage
Loss ratio and quality of markups	Share of capital in written-off companies Whether markups came from new rounds led by outside investors	Markups priced by new, independent investors count far more than insider-led ones
Follow-on reserves	Share of the fund held back to reinvest in its best companies	Without them, the fund gets diluted out of its best outcomes in later rounds

Red flags we look for: A high IRR with negligible DPI late in the fund’s life, returns that depend on a single company, and headline numbers quoted gross.

Best Category II AIFs: private equity, pre-IPO and private credit

Category II is the private-market middle ground, and it invests in one of two ways. Credit funds lend, on contract: a borrower agrees to pay interest and return principal. Equity and pre-IPO funds buy a stake before the public market prices it, then sell later.

So the best Category II fund is the one whose money visibly comes back. In credit, that means loans repaid on time and losses recovered. In equity, it means exits that turned paper gains into cash. Headline IRRs matter far less than what previous funds have actually distributed.

Private equity3 fundsPrivate credit3 funds

Category II private equity managers currently raising include a99 VC, Carpediem Advisors, Equanimity Management Services, Equentis Wealth Advisory Services, InCred Alternative Investments, Invicta Capserv, ITI Growth Opportunities, Kotak Alternate Asset Managers, Mangal Keshav Financial Services, Nandan Advisors, NAV Investment Consultants, Neeyovan Advisors, Neo Asset Management, Nine Rivers Capital, Nippon Life India AIF Management, Nuvama Asset Management, Quest4Value Investment Managers, Trezone Ventures, Unicorn India Ventures and White Whale Advisors.

Top 3 private equity Category II AIFs

Buy stakes in unlisted companies and make money when those stakes are sold or listed. Returns are lumpy and arrive late, so judge on exits already achieved.

Singularity Fund of Funds IISingularity AMCOne commitment spread across several Indian venture and growth funds; you pay a second layer of fees in exchange for diversification across managers.Explore fund
IndusBridge Ventures FundIndusBridge VenturesVenture fund focused on aerospace and defence, along with space and communications, from a team led by former Citi investment banker Ravi Kapoor.Explore fund
Bharat Value Fund Series VIWealth Company Asset ManagementThe Pantomath group’s SME and pre-IPO franchise, now on its sixth series.Explore fund

Several more private equity and pre-IPO AIFs are raising capital right now. Talk to a specialist about which suit your portfolio. Book a call

How we analyse private equity AIFs

Private equity goes through the same core toolkit as Category I: net IRR, MOIC, TVPI, DPI, RVPI and PME. The difference is the clock. Growth and pre-IPO investments are usually held for three to five years, so we expect cash to come back sooner and judge late distributions more strictly.

On top of the core metrics, we look at the following.

Metric	What it tells you	How we use it
DPI timeline	When distributions begin How quickly they build	Meaningful DPI expected by year 4–5 for growth and pre-IPO funds Missing DPI here is a sharper warning than in venture
Gross-to-net spread	Gap between gross IRR and net IRR	Much wider than peers = heavy fees, high expenses or an unfavourable catch-up clause
Value-creation attribution	How much of the gain came from revenue growth, margin improvement or a higher valuation multiple	Growth and margins = skill; multiple expansion = mostly market We prefer managers whose returns hold up with flat multiples
Entry valuation and exit route	Price paid Realistic exit: IPO, strategic sale or secondary sale	Pre-IPO funds tested for a shut IPO window We allow for the post-listing lock-in on pre-IPO shares
Holding period	How long each investment is held before exit	Same MOIC over a shorter hold = higher IRR Steadily lengthening holds usually mean exits are proving hard
Look-through for funds of funds	Performance and fees of each underlying fund	TVPI and DPI measured after both fee layers Check underlying managers aren’t ones you could access directly for less

Red flags we look for: Returns driven mainly by multiple expansion, a single exit carrying the whole fund, and DPI still missing as the fund approaches the end of its term.

Category II private credit managers currently raising include Aditya Birla Sun Life AMC, A.K. Alternative Asset Managers, Arnya RealEstates Fund Advisors, ElementOne Ventures, InCred Alternative Investments, Irris Whiteboard, Mavenark Asset Managers, Neo Alternative Asset Managers, Nippon Life India AIF Management, PL Alternative Investments Managers, Sundaram Alternate Assets and Vivriti Asset Management.

Top 3 private credit Category II AIFs

Lend to companies that banks underserve, earning contracted interest through the life of the fund. Judge on security cover, defaults and recoveries rather than the headline yield.

Franklin India Credit AIF Scheme IFranklin Templeton Alternative InvestmentsPerforming private credit from the alternatives arm of a global asset manager.Explore fund
ICICI Prudential Corporate Credit Opportunities Fund AIF IIIICICI Prudential AMCCorporate credit from one of India’s largest fund houses, in its third fund in the series.Explore fund
RevX Special Credit Opportunities Fund IIRevX CapitalStructured, secured credit for established, asset-heavy Indian businesses, from a private-credit manager focused on the mid-market.Explore fund

More private credit AIFs are open now, each with different tenures, hurdles and security structures. A specialist can help you compare them. Book a call

How we analyse private credit AIFs

In private credit the upside is fixed by contract, so most of the analysis is about the downside: will the money come back, on time, and how much of the yield actually reaches you.

We start with the fund’s structure, because terms that look like fine print change your real return. The comparison below draws on terms disclosed in current fund documents, including the RevX Special Credit Opportunities Fund II information memorandum.

Parameter	Common in the market	What we prefer	Why it matters
Fund size	Often around ₹2,500 crore	Sized to what the team can underwrite well; RevX SCOF II targets about ₹900 crore	A very large fund has to deploy into bigger, more competitive loans, or relax its standards to put money to work.
Tenure	About 7 to 7.5 years	Shorter, such as 5 years plus a 1-year extension	Less time for a borrower’s position to deteriorate, and your capital comes back sooner.
Capital drawdown	Called over 18 to 36 months	Fast or full drawdown	Committed money waiting to be called earns little. Slow drawdown dilutes your return on the full commitment, even when the fund’s IRR on drawn capital looks high.
Hurdle rate	10% to 12%	Higher, such as 13%	The manager earns its profit share only after investors receive a higher base return.
Distributions	Irregular	Fixed quarterly dates	Predictable income, and an early signal of whether borrowers are paying as agreed.
Return of principal	Up to 24 months after the fund term	Within 6 to 12 months	A shorter tail means less risk of your money being stuck in extensions.

Metric	What it tells you	How we use it
Security cover	Collateral value ÷ loan outstanding	Comfortably above 1x at loan and fund level Clarity on what the collateral is and how fast it can be enforced
Gross vs net yield	Rate charged to borrowers vs what investors receive after fees and expenses	We compare net yield Check cash interest vs interest accrued and paid at the end
Realised vs tracking IRR (XIRR)	Realised: return on loans already repaid Tracking: projection on loans still running	Only realised numbers count as track record Tracking figures assume every borrower repays in full
Defaults, recoveries and loss given default	How many loans came under stress How much was eventually recovered	A few defaults with strong recoveries can be safer than a book never tested
Concentration	Exposure to the largest borrowers and sectors	Limits how much one bad loan can hurt the fund
Team and investment committee	Underwriting experience Whether the committee includes independent members	We look for banking, NBFC and restructuring experience Committees with outside members, not only the deal team

Red flags we look for: High headline yield with thin security, distributions that are really an early return of your own capital, slow drawdown presented as discipline, and tracking IRRs presented as track record.

Best Category III AIFs: long-only and long-short

Category III is public-market skill with fewer handcuffs. Everything it owns is priced every day, so there is nowhere to hide a bad decision, and you can compare it against an index or a mutual fund at any time.

That makes the bar simple: a Category III AIF has to earn its fees by doing what a mutual fund or PMS cannot. That means shorting, hedging, using derivatives, or running a portfolio concentrated enough to be genuinely different.

Long-only3 fundsLong-short3 funds

Category III long-only managers currently raising include A9 Finsight, Abakkus Asset Manager, Aequitas Investment Consultancy, Alchemy Capital Management, AlfAccurate Advisors, Ambit Investment Advisors, Ashmore Investment Management India, Asymmetric Asset Managers, Dalal & Broacha Portfolio Managers, Enigma Investment Partners, First Water Capital Advisors, Green Portfolio, KLAY Securities, Knightstone Capital Management, SageOne Investment Managers, Sameeksha Capital, Shaan Patel Asset Management, Valuewise Advisory and WhiteOak Capital Asset Management.

Top 3 long-only Category III AIFs

Fully invested in listed stocks, with no shorting. Worth the AIF wrapper only when the portfolio is concentrated or differentiated enough to justify the fees.

Carnelian Bharat Amritkaal FundCarnelian Asset ManagementLong-only fund built around India’s long-term growth themes, from the house behind Carnelian’s range of listed-equity strategies.Explore fund
Negen Undiscovered Value FundNegen CapitalLong-only fund looking for value in under-researched listed companies.Explore fund
VQ India Inflexion FundValueQuest Investment AdvisorsLong-only fund from ValueQuest, the listed-equity house behind the VQ range of strategies.Explore fund

Dozens more long-only Category III AIFs are accepting investments. Find out which ones genuinely add to what you already own. Book a call

How we analyse long-only Category III AIFs

Listed funds give us monthly data, so we can measure far more than return. PMS AIF World Analytics uses time-weighted returns net of fees and expenses, as reported by the manager, over three years of monthly data against the BSE 500 TRI, and places each fund against the median of its peer category.

We look at three things: how consistent the returns are, how much risk was taken to earn them, and what you would actually own.

Metric	What it tells you	How we use it
TWRR, net of fees	Time-weighted return Strips out the effect of investor inflows and withdrawals	The fair basis for comparing managers Net figures only
Rolling returns	Returns over every overlapping window Median, worst and best	The range of outcomes investors actually got, whatever their entry date Not one flattering start point
Benchmark hit rate	Share of rolling windows and calendar periods in which the fund beat its benchmark	Consistency matters more than one standout year
Alpha and Jensen’s alpha	Return beyond what market exposure explains Jensen’s alpha formally adjusts for beta	Our core test of manager skill
Beta	Sensitivity to the market Beta of 1 = moves with the index	Separates skill from simply taking more market risk
Sharpe ratio	Return above the risk-free rate per unit of total volatility	Return per unit of risk vs the category median
Sortino ratio	Like Sharpe, but counts only downside volatility	More relevant if you mind losses more than swings
Treynor ratio	Return above the risk-free rate per unit of beta	Useful when the fund is one part of a diversified portfolio
Standard deviation	How widely returns swing, annualised	Compared with benchmark and peers Is the ride rougher than the reward?
Upside and downside capture	Share of the market’s gains and losses the fund captured	Ideal: lower downside capture, healthy upside Falls less than the market, keeps pace on the way up
Stock count and top-10 weight	How concentrated the portfolio is	Concentration is what justifies AIF fees We check it is deliberate
Active share	Share of the portfolio that differs from the benchmark	Low active share = AIF fees for near-index exposure
Sector bets and market-cap bias	Over- and underweights vs the benchmark Weighted average market cap	Explains where returns come from and what could hurt them
Turnover and cash	How often holdings change How much sits uninvested	High turnover adds cost Persistently high cash dilutes the equity exposure you pay for
Overlap with your portfolio	Holdings shared with your PMS and mutual funds	Run for every investor before we suggest a fund

Red flags we look for: Returns explained mostly by high beta, active share low enough to resemble an index fund, and a record that rests on one exceptional year.

Category III long-short managers currently raising include Alpha Alternatives, AlphaGrep Investment Management, ASK Long-Short Fund Managers, Astratinvest Financial Advisors, DSP Investment Managers, Helios Capital Management, ICICI Prudential AMC, Motilal Oswal AMC, Nuvama Asset Management, Prajana Advisors and The Investment Trust of India.

Top 3 long-short Category III AIFs

Can bet against stocks or hedge the market as well as buy. The aim is a smoother ride and returns that depend less on which way the index moves.

SBI Optimal EquitySBI Funds ManagementLong-short equity from India’s largest fund house, using a hedge leg to soften drawdowns.Explore fund
Swyom India Alpha FundSwyom AdvisorsLong-short fund from Swyom Advisors, built to earn returns that rely less on which way the market moves.Explore fund
Whitespace Alpha Hybrid PlusWhitespace FundHybrid strategy from Whitespace that pairs equity exposure with hedges to manage downside.Explore fund

More long-short and absolute-return AIFs are open this month. A specialist can help you match one to your risk appetite. Book a call

How we analyse long-short Category III AIFs

A long-short fund promises returns that depend less on the market, so we test that promise directly. We split returns into what came from market exposure and what came from the strategy itself, recompute every ratio on net returns, and stress-test the leverage that makes these strategies work.

Metric	What it tells you	How we use it
Gross vs net returns	Performance before and after fees and expenses	Strategy decks often show gross figures We restate everything net before comparing
Return attribution by sleeve	How much came from the market sleeve (beta) vs the alpha sleeve (e.g. hedging, derivatives)	Does the alpha leg add value consistently, or only in certain markets?
Alpha across periods	Excess return over the benchmark, from 1 month to since inception	Positive alpha across most periods, not just the longest
Information ratio	Alpha ÷ tracking error (the volatility of that alpha)	Our measure of how dependable the excess return is
Capture ratio	Upside capture ÷ downside capture	Above 1 = gains more in rising markets than it loses in falling ones
Sharpe, Sortino and Treynor ratios	Risk-adjusted return measures, as defined above	Recomputed with the same risk-free rate and data frequency for every fund A different assumption can flatter a ratio
Monthly volatility and average monthly return	Month-to-month swing The typical month	Annualised for comparison with long-only funds and the index
Gross and net exposure	Gross: longs + shorts, as % of NAV Net: longs − shorts, as % of NAV	Shows the real market risk and leverage Category III gross exposure is capped at 2x NAV
Maximum drawdown and recovery time	Largest peak-to-trough fall Time taken to recover	The real test of a hedged fund: how it behaved in sharp falls
Margin and pledging risk	Whether securities are pledged to fund derivative positions	Margin calls stress-tested in a fast fall, when these strategies are most exposed

Red flags we look for: Net exposure drifting up until the fund is effectively a leveraged long fund, ratios computed on gross returns or a convenient risk-free rate, and projected returns shown alongside realised ones.

More than 100 AIFs are open for subscription right now

The funds above are a starting point. Across Category I, II and III, well over 100 AIFs are accepting commitments this month, each with its own strategy, lock-in and minimum. Speak to a PMS AIF World specialist to find out which suit your goals, time horizon and existing portfolio.

Book a call with a specialist

Questions investors ask about the best AIFs

Which is the best AIF in India?

There is no single best AIF, because the three categories do different jobs. The best fund is the one whose strategy and lock-in match what your money is for, run by a manager with a record across several funds. The 15 funds on this page are a starting shortlist, not a ranking.

What is the minimum investment in an AIF?

₹1 crore per scheme for most investors, and ₹25 lakh for employees and directors of the fund manager.

Which AIF category is best for a first-time investor?

Category III is usually the easiest place to start, because holdings are listed, valued daily and often open-ended. Category II private credit suits investors looking for income. Category I is best kept to a small slice of capital you will not need for a decade.

What is the difference between DPI, TVPI and RVPI?

All three compare value with the capital you have paid in. DPI counts only cash already returned to you. RVPI counts the value still held in the fund, which is an estimate. TVPI adds the two together, so TVPI = DPI + RVPI. Early in a fund’s life most value sits in RVPI; a healthy fund converts it into DPI as it exits investments.

What is the difference between gross and net IRR?

Gross IRR measures the return on the fund’s investments before management fees, carried interest and expenses. Net IRR is what investors actually receive after all of them. The gap can be several percentage points a year, so funds should only ever be compared on net IRR.

How do you evaluate a private credit AIF?

Start with structure: fund size, tenure, how fast capital is drawn, the hurdle rate, how regularly distributions are paid and how quickly principal is returned. Then look at the loans: security cover, net yield to investors, realised rather than projected returns, defaults and recoveries, borrower concentration and the experience of the underwriting team.

What is active share and why does it matter?

Active share is the percentage of a fund’s portfolio that differs from its benchmark. A low figure means the fund looks much like the index, so you may be paying AIF-level fees for index-like exposure.

Are these funds ranked by returns?

No. Return figures across categories, fund vintages and tax treatments are not comparable on one scale, so we group funds by what they do rather than ranking them by past performance.

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For information and education only. Not investment advice, an offer or a solicitation. Inclusion on this page is not a recommendation or a ranking. AIFs are offered by private placement to eligible investors under the SEBI (Alternative Investment Funds) Regulations, 2012, and carry market, liquidity, valuation, concentration and credit risk. Availability changes month to month; read all scheme documents and consult your adviser before investing.