# SEBI’s New Consultation Paper: A Step Towards Flexible Co-Investment Models for AIFs

Published: 14 May 2025
Author: Treelife
Practice area: News
Source: https://treelife.in/news/sebis-new-consultation-paper-a-step-towards-flexible-co-investment-models-for-aifs/

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The recent consultation paper by SEBI proposing changes to the co-investment framework for **Category I & II** intends to allow creation of a **Co-Investment Vehicle (CIV)**, which would allow AIFs to offer co-investment opportunities to accredited investors in unlisted securities via a separate scheme under the AIF structure.

### **Key Takeaways:**

- A separate **CIV** scheme will need to be launched for each co-investment in an investee company, with prior intimation to SEBI, in accordance with the shelf PPM for CIV schemes filed with SEBI at the time of registration. Each **CIV** will require separate bank accounts, demat accounts, and a PAN.

- **CIVs** will have the flexibility to invest up to **100%** of their corpus in a single portfolio. Co-investment opportunities can only be provided to investors of the AIF who are **Accredited Investors**.

- **Exit timing** to be co-terminus for the **AIF** and **CIV**.

While the proposed changes could lead to more agile and competitive AIFs, it’s crucial that the regulatory framework remains streamlined and doesn’t introduce unnecessary complexity into the co-investment process. In light of this, SEBI has invited industry feedback on the consultation paper.

Reach out at **priya.k@treelife.in** for a discussion.

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