New Delhi, Aug. 3 -- SEBI's recently introduced GARUDA framework, which allows eligible Alternative Investment Fund (AIF) schemes to launch faster, has put the spotlight back on an investment category that has expanded rapidly over the past decade. While AIFs have become an important source of capital for startups, private businesses and alternative assets, they remain less familiar than mutual funds for many investors.

Industry experts say the key difference lies in the type of investors they are meant for, the assets they invest in and the flexibility they offer fund managers.

According to Chirag Shah, Executive Director, BlackSoil AMC, AIFs are privately pooled investment vehicles that invest in asset classes beyond traditional equit...