AIFs & Private Credit Funds
Portfolio valuation, SEBI-compliant fair value reporting, and credit analytics for India's Alternative Investment Funds — Category II private credit, Category III credit strategies, and offshore feeders.
Who this applies to.
SEBI-registered AIFs deploying into structured credit — primarily Category II private credit, infrastructure debt, and special situation funds — operate under a valuation framework that requires independent fair value at least quarterly. SEBI's 2023 AIF circular extended the definition of instruments requiring independent valuation, clarified Investment Committee governance, and enhanced LP reporting. Institutional LPs — IRDAI-regulated insurers, PFRDA-governed pension funds, and offshore fund-of-funds — now expect standards well above SEBI's minimum. Managers without documented, independent methodology face both LP attrition and regulatory risk as SEBI enforcement activity rises.
The analytical challenges this client type faces.
Quarterly SEBI-compliant valuation
Independent valuation using an Investment Committee-approved methodology, delivered within tight windows after each quarter-end. Complex instruments — convertibles with equity kickers, mezzanine with embedded options, structured credit — cannot be compressed without sacrificing quality.
LP reporting and transparency
Institutional LPs now request methodology documentation, sensitivity analysis, and independent market benchmarks — not just NAV summaries. Without structured documentation, fund managers cannot respond effectively, creating LP relationship risk and, for IRDAI-regulated investors, regulatory exposure.
Credit monitoring and early warning
Early identification of deterioration — three to six months before a covenant breach or missed payment — creates optionality: accelerated information collection, management engagement, proactive restructuring. Frameworks relying on management representations consistently flag problems later than those anchored to hard financial data.
Co-investment analytics
Co-investments require valuation consistent with the main fund but may have distinct rights, priority arrangements, and economics that affect the discount rate. Documentation of the basis for allocating economics is increasingly expected at LP due diligence.
SEBI audit and inspection preparation
SEBI has increased AIF examination activity, with inspection notices requiring contemporaneous documentation of valuation independence and methodology compliance. Reactive remediation after an inspection notice is significantly more costly than proactive documentation.
Distressed and special situation analytics
IBC-admitted companies, restructured instruments, and NPL positions require recovery-based valuation distinct from standard private credit frameworks. DCF calibrated to performing credit systematically overstates distressed value.
Our work for this client type.
Portfolio-level valuation
Instrument-by-instrument independent valuation with consistent methodology and quarterly turnaround aligned to the fund's reporting calendar. Preliminary estimates within ten business days of quarter-end to support internal NAV processes.
SEBI reporting support
Quarterly valuation memoranda in a standardised format aligned to SEBI's 2023 AIF circular — methodology, instrument-level detail, sensitivity, and quarter-on-quarter change attribution between credit and market factors.
Credit monitoring
Covenant-specific monitoring against each instrument's documented package, not generic credit metrics. Monthly exception reports distinguish breach, approaching-threshold, and trajectory-based early warning.
Audit and LP query support
Direct support for auditor queries and LP due diligence. Methodology summaries formatted for LP investment committee review; representation at LP due diligence calls when fund managers need independent valuation expertise present.
Distressed position analytics
Recovery-based valuation for distressed and restructured positions — IBC resolution modelling, SARFAESI enforcement, OTS economics — with scenario probability weights. Interim updates as material developments occur.
Markets we cover for this client type.
How we structure our work for AIFs.
Discuss how we can help.
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