New SEBI Rules For AIF LPs To Co-Invest

In an attempt to regulate offering of co-investment opportunities to investors (or LPs) of Alternative Investment Funds ("AIFs"), the Securities and Exchange Board of India ("SEBI") has recently introduced amendments¹ to the SEBI (Alternative Investment Funds) Regulations, 2012 (the "AIF Regulations")² and SEBI (Portfolio Managers) Regulations, 2020 ("PMS Regulations")³ on November 9, 2021 (referred to as the "Amendment Regulations").

These amendments come, in light of SEBI's recent request to AIF managers to provide details on co-investments made by various AIF LPs from April 1, 2019 to March 31, 2021.⁴

In February 2020,⁵ SEBI had released a template for the Private Placement Memorandum ("PPM") for AIFs to ensure and establish minimum disclosure standards for disclosures to be made under a PPM. The template PPM provided disclosure obligations in relation to co-investment opportunities, such as the eligibility criteria for participating in the co-investment,