An alternative investment is a fund established or incorporated in India which is a privately pooled investment vehicle, which collects funds from sophisticated investors, whether in India or abroad for investing in accordance with a defined investment policy for the benefit of investors. As an alternative to the conventional categories of financial assets that include Therefore it is a financial asset that does not fall into one of the conventional investment categories that include private equity or venture capital, hedge funds, managed futures, art and antiques, commodities, derivatives etc. Investing in AIF may provide huge returns, however the same is coupled with high risks and complex nature. Hence the major investors for AIF are institutional investors and HNIs.