The funds that do not come under Categories I or III and do not engage in leverage or borrowing other than to cover ongoing operating needs are referred to as Category II AIFs by SEBI. Funds that are invested in both debt and equity instruments fall under this category. Included are any monies that don’t already fall within Categories 1 and 3, respectively. The government does not grant any discounts for investments made for Category 2 AIFs.
AIF Category II