New AIF scheme to rescue dormant assets

The introduction of liquidation scheme for alternative investment funds (AIFs) by market regulator Sebi provides an additional avenue for managers and investors to derive the maximum value for unliquidated investments, experts said on Sunday.

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The new scheme provides flexibility to AIFs to deal with investments that are not sold due to a lack of liquidity during the winding-up process.

Also, it allows such unliquidated investments to be either sold to a new scheme of the same AIF (liquidation scheme) or to be distributed in-specie to investors of the AIF.

The regulator, on June 15, amended rules to permit AIF's to launch a liquidation scheme. Sebi, last week, laid out the modalities for launching the scheme and in-specie distribution to investors.