What Is the Minimum Corpus Required to Launch an AIF Scheme?

Anyone exploring how to set up an alternative investment fund in India eventually runs into the same number: twenty crore rupees. It shows up in nearly every conversation about the AIF scheme corpus requirement SEBI has laid down, and for good reason, it's the threshold that decides whether a fund can legally exist in the first place. But the full picture of minimum fund size AIF India rules is a little more layered than that single figure suggests, especially after a round of amendments SEBI pushed through over the past year that changed things for one specific category of fund. Here's what the corpus requirement actually looks like today, category by category.

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Every scheme offered by a Category I, Category II, or Category III AIF aside from angel funds must maintain a minimum corpus of at least ₹20 crore in accordance with the SEBI (Alternative Investment Funds) Regulations, 2012. This is not a one-time entity-level checkbox to check; rather, it is a scheme-level requirement. If a fund manager launches multiple schemes under the same AIF registration, such as private credit this year and a pre-IPO fund next year, each individual scheme has to independently clear that ₹20 crore bar. This is the ₹20 crore minimum corpus AIF figure that anchors the entire framework, and it applies uniformly whether the fund is investing in unlisted startups, structured credit, or listed securities through a Category III strategy.

Alongside the corpus itself, SEBI's AIF corpus rules require the fund's sponsor or manager to maintain what's called a continuing interest in the scheme, essentially skin in the game. For Category I and II AIFs, this works out to whichever is lower: 2.5% of the corpus, or ₹5 crore. For Category III AIFs, given the more actively traded, higher-leverage nature of the strategies involved, the requirement is higher, 5% of the corpus or ₹10 crore, whichever is lower. The logic is straightforward. A manager asking investors to commit ₹20 crore or more of capital should be putting a meaningful amount of their own money on the line too, not just charging a fee to manage someone else's.

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The corpus itself is built from investor commitments, and SEBI is specific about how large those individual commitments need to be. Every investor coming into a standard AIF scheme must commit at least ₹1 crore, a threshold set deliberately high to keep these vehicles restricted to sophisticated, high-net-worth participants rather than retail money. Employees and directors of the fund's investment manager get a lower entry point, ₹25 lakh, in recognition of the fact that they already understand the fund's strategy and risk profile from the inside. A scheme can onboard up to 1,000 such investors, a cap that exists to keep AIFs from functioning like a public offering in all but name.

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This is where things have genuinely changed, and it's worth getting right because a lot of material still floating around online reflects the old position. Angel funds, a subcategory built specifically to pool capital for early-stage startup investing, used to carry their own lower corpus threshold, ₹5 crore rather than the standard ₹20 crore, along with a minimum per-investor commitment of ₹25 lakh. That changed with SEBI's Second Amendment Regulations of September 2025. As part of a broader overhaul of the angel fund framework, which also restricted participation to accredited investors only and removed the old scheme-by-scheme structure in favor of pooling everything at the fund level, SEBI did away with the fixed minimum corpus and minimum commitment requirements for angel funds entirely.

What's replaced it isn't a corpus figure but an investor-count condition: an angel fund now needs to onboard at least five accredited investors before it can declare its first close, and it has twelve months from the date SEBI takes its placement memorandum on record to get there. In effect, the size of the fund is no longer gated by a rupee threshold at all; it's gated by having enough qualified investors willing to commit, however much or little that adds up to. For anyone researching the minimum corpus for an angel fund today, the accurate answer is that the old ₹5 crore rule has been retired, not reduced further.

Newer Structures: CIVs and Large Value Funds

SEBI has also carved out a couple of newer structures that sit outside the standard corpus math altogether. Co-Investment Vehicles, introduced to let accredited investors put additional capital alongside a fund's existing position in a specific portfolio company, are explicitly exempt from the ₹20 crore minimum corpus, along with several other standard AIF conditions like placement memorandum filings and diversification norms. At the other end, large value funds for accredited investors operate on an entirely different scale of commitment, ₹25 crore per accredited investor as of a December 2025 revision, down sharply from the ₹70 crore threshold that applied earlier. These structures aren't a way around the ₹20 crore rule for a standard scheme; they're separate categories built for narrower use cases.

So How Much Capital Does It Actually Take to Launch an AIF?

Putting the pieces together, the honest answer to how much capital to launch an AIF depends heavily on which structure you're setting up. For a standard Category I, II, or III scheme, ₹20 crore in investor commitments is the non-negotiable floor, on top of which the sponsor or manager needs to arrange their own continuing interest contribution, ₹5 crore or 2.5% of the corpus for Category I and II or ₹10 crore or 5% for Category III, whichever works out lower in each case. Realistically, that means a manager needs a credible path to at least ₹20-25 crore in total commitments, counting both outside investors and their own stake, before a scheme can be viable. For an angel fund, the capital bar has effectively been replaced by a relationship bar: five accredited investors willing to commit within a year matters more than hitting any specific rupee figure.

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It's worth stepping back and asking why SEBI bothers with a minimum corpus in the first place, since it would be simpler to let any fund launch at whatever size it can raise. The answer comes down to operational credibility. A fund running below a certain size struggles to diversify meaningfully and can't absorb its own running costs, audit, custodian, or compliance without those costs eating disproportionately into investor returns and often lacks the institutional weight to negotiate good terms in private deals. The ₹20 crore threshold, alongside the mandatory continuing interest from the manager, is SEBI's way of filtering out undercapitalized, poorly structured funds before they ever reach an investor's cheque book. It's a blunt instrument, but in a market where private fund structures are inherently harder to monitor than listed products, it does the job of setting a floor below which a fund simply shouldn't exist.

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