SEBI Formalises Co-Investment Schemes, Eases Path for Legacy VC Fund Settlement

By-Gopal Jain, Managing Partner, Gaja Capital & Co-Chair, Regulatory Affairs Committee, IVCA. 

“SEBI’s decision to formalise co-investment schemes under the AIF framework marks a pivotal shift in how capital can be mobilised for India’s private markets. By allowing fund managers to launch a dedicated co-investment vehicle for each deal, this move brings much-needed clarity, structure, and operational ease to a practice that’s long been in demand by institutional and accredited investors. It aligns well with global norms and reflects SEBI’s responsiveness to industry feedback.

The announcement of a settlement scheme for legacy venture capital funds is also a welcome step, providing a pragmatic path forward while ensuring accountability. Together, these reforms underscore the regulator’s balanced approach to deepening the ecosystem while addressing legacy bottlenecks.”