Case Study: How a Category II AIF Structured a Real Estate Fund

Most Indian real estate AIFs do not buy buildings. They lend to developers through structured debt, under a SEBI Category II registration that shapes almost every decision the manager makes. This case study follows an illustrative, composite fund, Sahyadri Realty Credit Fund I, a close-ended Category II AIF lending to residential developers in Mumbai and Pune. You see why the manager chose Category II, how the trust, sponsor, manager and trustee fit together, what SEBI's rules on minimum investment, sponsor commitment, leverage and concentration forced into the design, what the private placement memorandum actually said, how capital calls, fees, hurdle and carry worked in rupees, how individual project deals were secured and monitored, how pass-through taxation landed on investors, and how the fund's IRR and multiple were finally measured. Built for experienced retail investors, HNIs and angel investors considering a real estate AIF commitment.