Lowering of investment limit will make AIFs accessible to more investors

Risk of mis-selling of these funds to investors who don't understand their risks fully may also rise

The Securities and Exchange Board of India (Sebi) committee for deciding the investment norms of alternate investment funds (AIF), headed by former Infosys chairman N R Narayana Murthy, may recommend lowering of the minimum investment limit in them from Rs. 1 crore to Rs. 25 lakh, according to media reports. This will bring the minimum limit for investment in AIFs at par with that for portfolio management services (PMS). The committee is expected to submit its report by the end of this month.

Mutual funds and PMS allow investors to invest only in a few basic asset classes -- equities,