FME Regulatory Intelligence, Learning & Practice · IFSCA (Fund Management) Regulations, 2025

Topic C of 6 · 14 terms

Fund products and strategies

What does the fund invest in, and how?

Tap any term to open its full explanation: the meaning, an everyday comparison, how it works, a real example, why it matters, look-alike terms, what the rules say and a practice question.

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1 · In one sentence

Investing in established companies that are not listed on a stock exchange, to help them grow and sell the stake later at a profit.

2 · Think of it like thisThink of buying a share in a running restaurant, helping it open more branches, and selling your share at a profit a few years later. Private equity invests in established businesses to grow or improve them, then exits.

4 · A real-world example

A PE fund buys 30% of a profitable family-owned manufacturer.

5 · Why it matters

Returns come over several years when the stake is sold.

6 · How is it different from venture capital?

Private equityBacks established businesses
vs
Venture capitalBacks young start-ups

VC backs young start-ups; PE backs established businesses.

7 · Regulatory meaning

SEBI AIF Regulations, Reg 2(1)(r): an AIF investing mainly in equity or equity-linked instruments or partnership interests; typically Category II.

8 · Explain it to someone else

Remember it this way: PE = growing established private companies.

A fund buys 40% of a profitable 20-year-old manufacturer to expand it. This is typically:

Plain-English explanations to aid understanding. Regulatory points cite their source; general finance concepts are explained as commonly used. Not legal or tax advice.

Prashant Kumar

Meet the expert

CS Prashant Kumar

Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker

13+ years of experienceFCS Fellow member, ICSIAuthor Audit Under Fire

Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)

Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.