If retail feeder funds are GIFT City's public face, Alternative Investment Funds are its institutional backbone. AIFs are pooled vehicles built for sophisticated investors -- family offices, institutions, and high-net-worth individuals -- who can absorb higher minimums and longer lock-ins in exchange for strategies a daily-NAV retail fund simply can't run.
The three categories, briefly
- Category I: funds with positive economic externalities that regulators want to encourage -- venture capital, infrastructure, and social-impact strategies typically fall here, often with lighter leverage restrictions.
- Category II: the largest bucket by assets -- private equity, private credit, and real estate funds that don't take on significant leverage beyond day-to-day operational needs.
- Category III: funds that trade more actively and can use leverage and derivatives -- long-short equity, arbitrage, and multi-strategy funds live here.
Why minimums are so much higher
A typical GIFT City AIF sets a minimum ticket in six figures (commonly cited around $150,000), multiple times higher than the retail feeder minimum. That's not arbitrary gatekeeping -- it reflects both regulatory intent (AIFs are meant for investors who can evaluate illiquid, complex strategies without the same protections a retail scheme provides) and practical fund economics, since many AIF strategies simply don't scale efficiently below a certain ticket size.
The NAV transparency question
One thing that regularly confuses newcomers: many GIFT City AIFs don't publish a public NAV anywhere. That isn't a red flag -- under IFSCA's regulations, private AIFs are not required to disclose NAVs publicly. Instead, capital-call statements, portfolio updates, and NAV figures go directly to registered unit holders, the same way a private equity fund anywhere in the world would report to its LPs. If you're evaluating a GIFT City AIF and can't find a public NAV, that's expected -- ask the fund manager directly instead of treating the absence as a data gap on a tracker site.
Lock-ins and liquidity
Expect lock-in periods of two to four years depending on strategy, longer for Category I and II funds running genuinely illiquid underlying assets. Category III funds trading liquid instruments sometimes offer more frequent redemption windows, but 'AIF' and 'daily liquidity' rarely belong in the same sentence -- treat any AIF allocation as patient capital by default.
