SEBI/HO/AFD/AFD - POD - 1/P/CIR/2025/126

2 · 1. Managers of AIFs shall make co-investment for an investor in an investee company either through PMS route or CIV scheme route .

2 · 2. In terms of regulation 17(A)(2), manager of AIF shall file a shelf placement memorandum (template available at Annexure), that inter alia includes, principal terms relating to co-investments, governance structure, and regulatory framework for co-investment, etc.

2 · 3. Each CIV scheme shall have separate bank account and demat account and assets of each CIV scheme shall be ring fenced from assets of the other schemes .

2 · 4. Co -investments of an investor in an investee company across CIV schemes shall not exceed three times of the contribution made by such investor in the total investment made in the said investee company through the scheme of the AIF to which aforesaid CIV schemes are affiliated.

2 · 4.1.Multilateral or Bilateral Development Financial Institutions;

2 · 4.2.State Industrial Development Corporations;

2 · 4.3.Entities established or owned or controlled by the Central Government or a State Government or the Government of a foreign country, including Central Banks and Sovereign Wealth Funds.

2 · 5. In case an investor of a scheme of an AIF excused / excluded or has defaulted in contributing to the investment made in an investee company by such scheme of AIF, such investor shall not be allowed to co-invest in the said investee company.

2 · 6. The manager shall ensure that the CIV scheme does not make any investment:

2 · 6.1.that would lead to its investors acquiring or holding an interest/exposure in an investee company indirectly, that they cannot acquire or hold directly,

2 · 6.2.that would necessitate additional regulatory disclosure if they had invested directly

2 · 6.3.where the investee company cannot receive investments from such investor directly.

2 · 7. CIV Scheme shall not borrow funds directly or indirectly or engage in any kind of leverage.

2 · 8. Investors of a CIV scheme shall have rights in the investment of the CIV scheme and in the distribution of proceeds of the investment, pro-rata to their contribution to the CIV scheme, except to the extent carried interest (or additional return or whatever name it is called) is shared with the sponsor or manager of the AIF or employees/directors/partners of the manager of AIF.

2 · 9. Any expenses associated with co-investment, shall be shared proportionately between the scheme of AIF and CIV scheme in the ratio of their investments.

2 · 10. CIV scheme shall be subject to implementation standards, if any, formulated by Standard Setting Forum of AIF, in consultation with SEBI, to ensure that the investment by CIV scheme are made for bona-fide purposes and that the flexibility extended in this regard is not misused.