SWAMIH Fund

News: Recently, the Government of India’s Special Window for Affordable & Mid-Income Housing (SWAMIH) completed its first residential project. The residential project – Rivali Park, located in suburban Mumbai, was the first housing project in India to have received funding under the SWAMIH Fund.

SWAMIH Fund:

  • This is a government backed fund that was set up as a Category-II AIF (Alternate Investment Fund)debt fund registered with SEBI, launched in 2019.
  • SWAMIH Investment Fund was formed to complete construction of stalled, RERA-registered affordable and mid-income category housing projects which are stuck due to paucity of funds.
  • The Investment Manager of the Fund is SBICAP Ventures, a wholly-owned subsidiary of SBI Capital Markets, which in turn is a wholly-owned subsidiary of the State Bank of India. The Sponsor of the Fund is the Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India.

Alternative Investment Fund (AIF):

  • AIF means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors. Through a company, or a Limited Liability Partnership (LLP), an Alternative Investment Fund can be established.
  • AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities. Other exemptions include family trusts, employee welfare trusts or gratuity trusts.

Categories of AIFs:

Category-I:

  • These funds are invested in businesses that have the potential to grow financially such as StartUps, Small and Medium Enterprises. The government encourages investments in these ventures as they have a positive impact on the economy with regards to high output and job creation.
  • Examples include Infrastructure Funds, Angel Funds, Venture Capital Funds and Social Venture Funds.

Category-II:

  • Under this category, funds that are invested in equity securities and debt securities are included. Those funds not already under Category I and III respectively are also included. No concession is given by the government for any investment made for Category II AIFS.
  • Examples include Real Estate Funds, Debt Fund, Private Equity Funds.

Category-III:

  • Category-III AIFs are those funds which give returns under a short period of time. These funds use complex and diverse trading strategies to achieve their goals. There is no known concession or incentive given towards these funds specifically by the government.
  • Examples include Hedge Funds, Private Investment in Public Equity Funds, etc.