Lawple Insights

As India’s private capital markets deepen, the Securities and Exchange Board of India (SEBI) continues to refine its regulatory architecture to facilitate sophisticated allocations into Alternative Investment Funds (AIFs). The September 2025 SEBI board meeting proposes a transformational paradigm: a distinct AIF regime tailored exclusively for Accredited Investors (AIs), aligning India with global best practices while preserving market integrity and advancing investor protection to a gold standard.

The Securities and Exchange Board of India (SEBI) has introduced a comprehensive framework governing co-investment opportunities within the ambit of the SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations). These amendments aim to provide clarity, enhance investor protection, and promote market discipline in co-investment structures involving AIF managers, sponsors, investors, and third-party participants. The framework distinctly sets compliance parameters for both accredited and non-accredited investors, operationalizes the roles of Co-investment Portfolio Managers (CPMs) and Co-investment Vehicles (CIVs), and stipulates specific conditions for third-party co-investors through the Investment Adviser (RIA) route. This article systematically analyzes the structure, legal nuances, practical challenges, and strategic considerations for market participants, offering actionable recommendations for compliance and risk mitigation in light of the evolving regulatory landscape.