Description
Category III Alternative Investment Funds Managers Workbook is a comprehensive, exam-aligned resource for professionals managing or aspiring to manage Category III AIFs in India. Developed by the Certification team of the National Institute of Securities Markets (NISM), this workbook builds core and advanced competencies across investment theory, AIF ecosystem and structuring, governance, valuation, performance measurement, benchmarking, taxation, and the complete regulatory framework.
This book is intended for the following audience:
AIF Managers & Investment Teams of Category III schemes (hedge/long-short, absolute-return, arbitrage, quant strategies)
Compliance, Operations & Risk Professionals supporting AIFs and investment managers
Valuation, Fund Accounting & Reporting Teams working with NAV, returns, and benchmarking
Lawyers & Advisors engaged in AIF documentation, negotiations, and transaction support
Students & Job Aspirants seeking a structured pathway into India’s securities markets and AIF industry
The Present Publication is the April 2025 Workbook Version. It is developed in collaboration with the Certification Team of NISM, Archit Lohia, Pratap Giri and Dr Rachana Baid and reviewed by Biharilal Deora. It is published exclusively by Taxmann, with the following noteworthy features:
[End-to-end AIF Coverage] From investment theory foundations to advanced Category III strategies, risk, performance, governance, NAV, and exits
[Practice-oriented Pedagogy] Illustrative caselets and MCQs
[Regulatory Focus] SEBI (AIF) Regulations 2012, FEMA, PMLA, SEBI (PIT), SEBI (PFUTP), ICDR, FPI Regulations, FATCA/CRS—contextualised for Category III fund management
[Valuation & Benchmarking Depth] Equity, fixed-income and business valuation approaches; risk-adjusted metrics, index methodologies, and performance benchmarking
[Governance & Documentation] Fund constitution, IMAs, PPMs, subscription agreements, wrappers, and best-practice codes of conduct
[Exam-ready Design] Lucid explanations, structured learning flow, and explicit mapping to syllabus weightages
The coverage of the book is as follows:
Section A — Basics of Investments
Investment landscape; traditional vs. alternative assets; channels and portfolio roles
Modern Portfolio Theory & Capital Market Theory – Efficient frontier, CAPM, SML; risk/return estimation and optimisation
Section B — Understanding the AIF Ecosystem
Evolution of AIFs in India, categories and suitability; Category III vs. traditional products; diversification and risk-management roles
AIF Structuring & Pooling – Trust/LLP/company forms; comparative analyses; fund anatomy
Fees & Performance – Management fees/expenses, hurdle rates, high-water marks, risk types and measures, pre/post-tax returns, risk-adjusted metrics
Indices & Benchmarking – Stock, bond, composite indices; methodologies; benchmarking principles
Legal Documentation & Negotiations – Constitutive documents, IMAs, PPMs, subscription agreements, support-service contracts
Section C — Managing AIF Investments (Category III)
Investment Strategies employed by Category III AIFs
Governance & Due Diligence – Investor DD, agreements, conflict management, co-investments, codes of conduct, best practices
Valuation – Fixed-income basics; equity and business valuation (DCF, multiples, asset-based); NAV computation for Category III (including series); role of registered valuers; applicable regulations
Fund Monitoring, Reporting & Exit – Regulatory reporting, exit options, winding up, liquidation, and dissolution frameworks
Section D — Taxation & Regulatory Framework
Taxation of AIFs & Investors – Set-off/carry-forward, GAAR, MLI, other applicable taxes with examples
SEBI (AIF) Regulations 2012 – Registration/eligibility, sponsor/manager commitment, open/close-ended schemes, accredited investors, closes and tenure, demat of units, corpus-raising, Category III operational/prudential/reporting norms, general obligations, inspection, codes, surveillance, disclosure and due diligence
FEMA – Inbound/overseas investment routes, foreign investments in/through AIFs
PMLA compliance and other SEBI regulations (PIT, PFUTP, ICDR, FPI) plus FATCA/CRS
The structure of the book is as follows:
Logical Progression – Foundations → AIF ecosystem & structure → Category III portfolio management → Valuation & monitoring → Taxation & regulation
Syllabus & Weightages – Clear mapping of chapters to marks (e.g., Strategies—12, Structuring—10, Performance—10, Valuation—10, Regulatory—10, Monitoring/Exit—10, etc.), enabling focused study planning
Learning Aids – Definitions, worked illustrations, comparative tables, and annexures for quick revision and practical application
