How to Read an AIF Fund Factsheet

Most investors open a fund factsheet, skim past the numbers, and jump straight to the returns chart. Here's the thing nobody tells new AIF investors: the return number at the top of the factsheet is the least useful figure in the entire document. Three numbers do all the real work here: NAV, corpus, and deployment ratio. Almost nobody stops to look at them properly; everyone's eyes go straight to the return percentage instead. But give these three even five minutes of real attention, and the rest of the factsheet stops looking like a spreadsheet dump and starts looking like a report card that stops reading like a pile of numbers someone dumped on a page. It starts telling you something.

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AIF NAV explained Put simply, NAV, or Net Asset Value, tells you what one unit of the fund is worth once you take everything it owns and subtract what it owes. Mutual fund investors have known this concept for years. What's different in an AIF is the machinery running underneath it, and that difference actually matters quite a bit.

A mutual fund holding listed stocks can price its NAV every single day because the underlying shares trade on an exchange with a visible price. An AIF, especially a Category I or II fund investing in unlisted companies, doesn't have that luxury. Unlisted shares don't have a daily market price. So what does NAV mean in an AIF context specifically? It's usually the outcome of an independent valuation exercise, carried out by a third-party valuer, typically every six months or whenever something material happens to a portfolio company, a fresh funding round, a big revenue swing, or an acquisition offer.

This is exactly why AIF NAV moves in steps rather than a smooth daily line. A flat NAV for a few months doesn't necessarily mean nothing happened. It often just means the fund hasn't hit its next valuation cycle yet. Investors who don't know this sometimes panic over a "stagnant" NAV, when really, the fund is simply waiting for its scheduled revaluation.

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Fund corpus meaning trips up more investors than it should, mostly because factsheets tend to throw around three different corpus figures without explaining which is which.

There's a committed corpus, the total amount investors have promised to put in over the fund's life. There's the drawn corpus, the portion actually called and received so far. And there's a deployed corpus, the part that's gone into actual investments. Take a factsheet showing a ₹500 crore corpus. That ₹500 crore figure might simply mean investors have committed to put in that amount over time, not that the fund has actually deployed ₹500 crore into companies yet. That distinction changes how you should read everything else on the page.

So when you're asking what a corpus is in an alternative investment fund, the honest answer is: check which corpus they mean before you draw any conclusions. A fund that looks small on committed corpus but has deployed almost all of it aggressively is telling a very different story than a fund sitting on a large committed corpus with most of it still uncalled.

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If there's one metric worth training your eye on, it's this one. Deployment ratio AIF figures show what percentage of the fund's available capital has actually gone into investments, as opposed to sitting in cash or liquid instruments waiting to be deployed.

How to interpret fund deployment ratio comes down to context, not a single ideal number. A newly launched fund with a 20% deployment ratio isn't underperforming; it's still in its capital deployment phase, sourcing and closing deals. A fund that's three years into its tenure and still sitting at 30% deployment is a different conversation entirely; that's capital not working for you, and it's worth asking the fund manager why.

Category I AIFs investing in sectors like SMEs and startups are expected under SEBI norms to deploy a large share of their investable corpus, generally around 75%, into the specific sectors they're mandated to focus on. When a factsheet shows deployment tracking well against that kind of benchmark, it signals discipline. And if that lag keeps showing up quarter after quarter, it's worth noting down, well before you take the rest of the report at face value.

Reading These Three Together

None of these numbers mean much in isolation; that's really the point of an AIF factsheet explained for investors the right way. NAV tells you what a unit is worth today, based on the last valuation. Corpus tells you the scale of capital involved and which stage of that capital you're actually looking at. Deployment ratio tells you how much of that capital is actively working versus parked in cash.

Put together, they answer the question every investor should be asking: is my money invested, growing, and being managed the way the fund said it would be? A fund with a rising NAV, healthy corpus growth, and a deployment ratio climbing toward its target is doing what it set out to do. A fund with a flat NAV, sluggish corpus calls, and a deployment ratio that hasn't moved in two factsheets is one you should be asking harder questions about.

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Most investors default to one number: the return percentage on the cover page. But learning how to evaluate AIF fund performance metrics properly means looking at what's driving that number. A strong return sitting on top of a low deployment ratio might just mean a handful of early investments did well, while a large chunk of committed capital still hasn't found a home. That's not the same as a fund where most of the corpus is deployed and performing.

It's also worth tracking these three metrics across factsheets over time, not just reading the latest one in isolation. A single snapshot tells you where the fund stands today. A few quarters side by side tell you whether it's moving in the direction it promised.

Conclusion

In summary, a fund factsheet isn't built to be read cover to cover for the return number alone. NAV, corpus, and deployment ratio are the three figures doing the real work, and once you know what each one is actually measuring, the rest of the document becomes far easier to make sense of. The next time a factsheet lands in your inbox, start with these three before you get anywhere near the performance chart.

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