Rajani Associates advises CapitalSquare on SEBI Registration of Category 3 AIF

Rajani Associates has acted for and advised CapitalSquare Ventures LLP and the Investment Manager, CapitalSquare Investment Manager Private Limited, with respect to formation and registration of Category 3 Alternative Investment Fund ("AIF") with SEBI, being a close ended Fund, under the SEBI (Alternative Investment Fund) Regulations, 2012.

The Firm's scope of work included: (i) Reviewing, revising and finalising the Fund documents i.e. Private Placement Memorandum, Investment Management Agreement, Indenture of Trust and Contribution Agreement; (ii) Assisting the client in connection with the SEBI Application for registration as AIF; (iii) Co-ordinating with the Trustee, the Merchant Banker and the clients in preparation of the responses to the queries raised and clarifications sought by SEBI; (iii) Meeting the concerned SEBI officials in connection with the queries raised and clarifications sought by SEBI, addressing their concerns and queries, revising the fund documents accordingly and re-submitting the same with SEBI.

The transaction team was led by Ashish Parwani (Partner) and Rajeev Nair (Partner), with support from S. Shivganesh (Senior Associate) and Ishita Raghav (Associate).

A Category III Alternative Investment Fund (AIF) in India is a privately pooled investment vehicle registered with SEBI that employs complex and diverse trading strategies, including leverage, with the aim of generating short-term returns. These funds often function like hedge funds and may use techniques such as long-short strategies, arbitrage, derivatives trading, or structured credit.

Unlike Category I and II AIFs, Category III funds are permitted to borrow and leverage, subject to regulatory limits. They may be structured as open-ended or close-ended schemes and are typically targeted at high-net-worth individuals or institutional investors, with a minimum investment requirement of ₹1 crore per investor (₹25 lakh for employees or directors).

CapitalSquare provides one-stop solution for fund raising solutions and financial advisory services through its Merchant Banking & Investment Banking, Wealth Management, Project Management and Insurance Brokerage arms. As of date the Group has raised more than ₹42,000 rore for its clients, successfully concluded domestic and cross border JVs and acquisitions and has provided risk management solutions to large corporate.

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