Plan your investment
What Our Plans Cover
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Investment across the fund's portf...
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Professional origination
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Periodic valuation and investor re...
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Distributions as investments are r...
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Participation through a contributi...
Who Can Consider This Plan?
- Minimum commitment of ₹1 crore per investor, as regulated
- Indian resident individual, HUF, trust, company or NRI
- Completed KYC with the fund
- Ability to meet capital calls through the drawdown period
- Acceptance by the fund manager, which is discretionary
What May Not Be Covered?
- Liquidity before the fund's realisation period
- Any guarantee of return or of capital
- Leverage beyond operational requirements, by regulation
- A secondary market for the underlying investments
- Control over individual investment decisions
Always check the policy wording before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading investments companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced investments professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
Category II covers alternative investment funds that do not fall into Category I or III and do not use leverage other than for operational needs. In practice it is the largest category, holding private equity funds, private credit funds, real estate funds and structured debt strategies.
Private credit has become the most visible use of the structure in India. These funds lend to companies that banks will not serve on terms banks will not offer, at yields well above listed debt, secured against assets or cash flows.
The yields are attractive and the risks are correspondingly real. Borrowers here are typically those without straightforward access to bank finance, and the loans are illiquid with no secondary market. When a credit deteriorates, there is no price at which to exit — only a recovery process.
Who should consider it
Investors with substantial portfolios seeking private market exposure. Investors wanting credit yields above listed debt and able to accept illiquidity. Investors in private equity or real estate strategies with long horizons.
Benefits
- Access to private equity, private credit and real estate strategies
- Yields above listed debt on credit strategies
- Security over assets or cash flows on secured credit funds
- Professional origination and diligence
- Diversification away from listed market exposure
- The broadest range of strategies within the AIF framework
What is included, and what is not
Read the right-hand column first. It is the one that tends to surprise people later.
Included
- Investment across the fund's portfolio
- Professional origination, structuring and monitoring
- Periodic valuation and investor reporting
- Distributions as investments are realised or interest is collected
- Participation through a contribution agreement
Not included
- Liquidity before the fund's realisation period
- Any guarantee of return or of capital
- Leverage beyond operational requirements, by regulation
- A secondary market for the underlying investments
- Control over individual investment decisions
Terms vary between providers and between plans from the same provider. The offer document you receive is what governs — we will walk you through it before you commit.
How it works with us
- 1 We start with whether an AIF suits you at all A one-crore minimum, multi-year lock-ins and higher fees. If a mutual fund does the same job, we will say so.
- 2 Category and strategy matched to the objective Category I, II and III are genuinely different things. Choosing between them is the substantive decision.
- 3 Fees and terms read in full Management fee, carry, hurdle rate, catch-up and drawdown schedule. These vary enormously and compound over a fund's life.
- 4 Commitment and drawdown planned You commit capital that is called over time. Liquidity has to be arranged for calls you cannot decline.
- 5 Reporting tracked through the fund life Valuations are periodic and taxation differs by category. We keep the reporting straight through to wind-up.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- On credit funds, understand who the borrowers are and why they are not borrowing from a bank. That answer is the risk.
- Security matters. A secured credit fund with a genuine charge on cash-generating assets is a different proposition from unsecured lending at the same yield.
- There is no secondary market. When a credit deteriorates you cannot sell; you participate in a recovery process that takes years.
- Read the fee structure fully — management fee, carry, hurdle and catch-up. On a credit fund those fees consume a meaningful share of a yield that looks high gross.
- Concentration within the fund is worth checking. A credit portfolio with a handful of large exposures behaves very differently from a diversified one.
Documents required
- PAN card
- Aadhaar or other identity proof
- Address proof
- Demat account details
- Bank account proof
- Net worth or income evidence, where the fund requires it
- Completed KYC and contribution agreement
Frequently Asked Questions
What is private credit and why does it yield more?
Lending to companies that banks will not serve, or on terms banks will not offer, usually secured against assets or cash flows. The yield premium compensates for illiquidity and for borrower credit quality. Understanding why a borrower is not using a bank is the essential piece of diligence.
Can I exit if I change my mind?
Not readily. There is no secondary market for the underlying investments and redemption is generally not available. Capital returns as investments are realised, on the fund's timetable rather than yours.
What happens if a borrower defaults?
A recovery process, which takes years and produces a partial outcome at best. Unlike listed debt there is no price at which to exit a deteriorating credit — you are in it until the recovery concludes.
How do the fees work?
Typically a management fee on committed or invested capital plus a carry on profits above a hurdle rate, sometimes with a catch-up provision. These vary considerably and compound over the fund life, so read them in full rather than accepting a summary.
Is this better than a debt mutual fund?
It targets higher yields and accepts illiquidity, concentration and credit risk that a debt fund does not take. For an investor who can genuinely lock capital away and size the allocation appropriately, it can be a useful diversifier. As a substitute for liquid fixed income, it is not.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.