Taxmann's Alternative Investment Fund Managers - Book By NISM

Edition : March 2026 (Workbook Version)

Alternative Investment Fund Manager is a complete working treatment of Alternative Investment Funds in India, covering how an AIF is structured, priced, governed, valued, monitored, taxed, wound up and regulated. Published by Taxmann as the official NISM workbook, it serves equally as a desk reference for anyone who manages, advises, services or invests in an AIF.

The distinguishing feature is that the subject is computed, not merely described. Fee waterfalls, IRR and PME, NAV determination and tax liability are all worked through with figures, and every regulatory proposition is footnoted to the amendment or circular it comes from. It is also the prescribed study material for the NISM-Series-XIX-C: Alternative Investment Fund Managers Certification Examination, the certification SEBI has notified for the key investment team of an AIF Manager.

This book is intended for the following audience:

• Fund Managers and Key Investment Team Members of Category I, II and III AIFs
• Sponsors, Trustees, Compliance Officers and Investment Committee Members
• Fund Operations and Reporting Teams handling capital calls, NAV, PPM audit and SEBI filings
• Merchant Bankers, Custodians, RTAs, Fund Accountants, Registered Valuers and Legal and Tax Advisers
• Institutional Allocators, Family Offices and HNI Investors conducting fund and manager due diligence
• Wealth Managers, RIAs and Distributors positioning AIFs against PMS and mutual funds
• Chartered Accountants, Company Secretaries, Advocates, CFA Candidates and MBA (Finance) Students
• Candidates for the NISM-Series-XIX-C Examination, for whom this is the prescribed workbook

The Present Publication is the March 2026 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 and Taxmann's Editorial Board. It is published exclusively by Taxmann, with the following noteworthy features:

• [Complete Coverage in One Volume] Portfolio theory to statutory detail, written so that a commercial term introduced in one chapter is computed in another and traced to its regulatory source in a third
• [Full Life-Cycle Fund Case] An eight-year close-ended fund worked in twelve steps: cash flows, gross and net fund IRR, the J-curve, hurdle rate distribution, the distribution waterfall, ROI metrics and investor-level net IRR
• [48 Worked Examples and Illustrations] Including NAV and Series NAV computation for a Category III AIF, index construction under three weighting methods, and three fully worked taxation examples at fund and unitholder level
• [Three Practitioner Annexures] A fund-level and investor-level risk factor template, a fund due diligence questionnaire, and the Investor Charter for AIFs, each drafted for direct use
• [Comparative Analysis in 21 Tables] Setting the three AIF categories, Category III against PMS and mutual funds, and domestic, offshore, parallel and unified structures side by side
• [Amended & Updated] Circular references running to 4 March 2026, covering the pro-rata and pari-passu framework, the dissolution period, the liquidation scheme and the specific due diligence obligations
• [Built-in Study Apparatus] Learning Objectives opening every chapter, self-assessment questions closing every chapter, and a glossary of private equity and venture capital terms

The coverage of the book is as follows:

• Investment Foundations (Chapters 1 to 5)
• Saving, investment and speculation; the required rate of return and ten risk types; informational efficiency and market anomalies; Modern Portfolio Theory to the efficient frontier; Capital Market Theory, CAPM, the Security Market Line and multi-factor models
• The AIF Product and its Ecosystem (Chapters 6 to 8)
• The ten fund types across the three SEBI categories; suitability and asset allocation; Category III AIFs against PMS and mutual funds; the ecosystem of sponsors, trustees, managers and ten categories of service provider; fifteen industry concepts from capital commitment and drawdown to the waterfall and the PPM; pooling principles, buy-out structures and onshore, offshore, parallel, unified and master-feeder funds.
• Fund Economics and Benchmarking (Chapters 9 and 10)
• Management fees, hurdle rate, high-water mark, catch-up, clawback and the impact of GST; thirteen risk types in AIFs; standard deviation, skewness, kurtosis and maximum drawdown; IRR, the J-curve, PIC, DPI, RVPI, TVPI, the Kaplan-Schoar PME and Direct Alpha; the Sharpe and Treynor ratios and Value at Risk; index construction and the SEBI performance benchmarking framework.
• Strategy, Governance and Documentation (Chapters 11 to 13)
• Nine Category III strategies from long-only to merger arbitrage and pre-IPO; deal sourcing and business due diligence; ten investor protection rights; fund governance, the Investment Committee, conflicts of interest and co-investment norms; manager evaluation and selection; the trust deed, Investment Management Agreement, subscription agreement, side letters, the PPM and its audit.
• Valuation, Monitoring and Exit (Chapters 14 and 15)
• Asset-based, DCF, and relative valuation; the IPEV Guidelines; NAV, mark-to-market, and Series NAV; the valuation regulations and the role of registered valuers; the Stewardship Code, Compliance Test Reporting, exit options, secondaries, winding up, the liquidation scheme, and the dissolution period.
• Taxation and Regulation (Chapters 16 and 17)
• Pass-through taxation of Categories I and II under Sections 115UB and 10(23FBA); trust taxation of Category III; surcharge, loss set-off, GAAR and the MLI. Then 87 pages on the SEBI (AIF) Regulations 2012 covering registration, sponsor commitment, tenure, the accredited investor framework, corpus and investment conditions, dematerialisation, obligations and reporting, followed by FEMA, PMLA and four further SEBI regulations with FATCA and the CRS.

The structure of the book is as follows:

• Cumulative Rather Than Modular — Waterfall mechanics introduced in Chapter 7 are computed in Chapter 9; the PPM introduced in Chapter 7 is documented and audited in Chapter 13; valuation in Chapter 14 feeds into the reporting obligations in Chapter 15
• A Fixed Chapter Template — Incorporates a Learning Objectives opening, self-assessment questions at the close, and headings numbered to three levels for targeted revision
• Weighted Towards Practice — Fee Structure, Fund Performance, and Regulatory Framework run to 87 pages each; the five theoretical chapters together occupy 80
• Three Annexures — They are placed at the end of the chapters they support, and there is a closing glossary