SEBI has allowed the introduction of a new product in the AIF basket called Special Situation Fund, which will invest only in 'stressed assets'.
"The Board approved amendment to AIF Regulations, to introduce Special Situation Funds, a sub-category under Category I AIF, which shall invest only in ‘stressed assets’," SEBI said on Tuesday.
At present, sub-categories of Category I AIFs include venture capital funds, SME funds, social venture funds and infrastructure funds.
The regulator said that many of the prevalent rules will be relaxed for the new AIF category. Like, they will be exempted from investment concentration norm. This means that there will be no cap on investment in listed and unlisted securities of a single company.
As per the rules announced by SEBI, investors will have to invest a minimum of Rs. 10 crore. In case of accredited investors, the minimum amount is Rs. 5 crore.
The Special Situation Fund will have to maintain a minimum corpus of Rs. 100 crore.
Which securities can AIFs invest in?
At present, SEBI has listed four kinds of securities — stressed loans available for acquisition as per RBI framework, loans part of resolution plan approved under IBC, security receipts issued by asset restructuring companies and securities of companies in distress.