India:
SEBI Formalises The Use Of Co-investments But Leaves Some Question Marks?
26 April 2022
Resolut Partners
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Through a series of amendments to the Securities and Exchange
Board of India (Alternative Investment Funds) Regulations, 2012
(the "AIF Regulations") and the Securities and Exchange
Board of India (Portfolio Managers) Regulations, 2020 (the "PM
Regulations"), the Securities and Exchange Board of India
("SEBI") has formalised the use of co- investments
alongside an alternative investment fund ("AIF").
Although there was no specific bar on co- investments under the AIF
Regulations, fund sponsors quickly discovered that they likely
needed to obtain an additional licence to advise / manage a
co-investment. Further, there was little prospect of aggregating
capital from various co-investors into a singlevehicle since doing
so may have tantamounted to "pooling" of funds and
triggered a requirement to register as an AIF, which in turn would
have meant being subject to the diversification restrictions.
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