Alternative Investment Funds (AIFs) have increasingly become an essential part of India’s investment ecosystem, offering investors diverse opportunities across various sectors. However, as with any investment vehicle, the closure or winding-up process can present significant challenges. Whether due to unresolved legal disputes, pending tax liabilities, or ongoing operational expenses, the exit process for AIFs can often be bogged down by various complications that hinder an efficient closure. Recognising this, the Securities and Exchange Board of India (SEBI) has proposed a set of regulatory changes aimed at addressing these challenges, streamlining the exit process, and offering greater flexibility to AIFs, vide a Consultation Paper dated 5th February 2026.
