AIF Managers III
AIF Manager certification for Category III — hedge fund strategies, leverage, derivatives, and risk frameworks.
Exam Pattern & Marking
Detailed Syllabus
15 chapters · 107 total marks
| # | Chapter | Marks | Practice Qs |
|---|---|---|---|
| 1 | CIII Investment Strategies | 12 | 60 |
| 2 | CIII Fee Structure and Fund Performance | 10 | 50 |
| 3 | CIII Fund Monitoring Reporting and Exit | 10 | 50 |
| 4 | CIII Fund Structuring | 10 | 50 |
| 5 | CIII Regulatory Framework | 10 | 30 |
| 6 | CIII Valuation | 10 | 50 |
| 7 | CIII Legal Documents and Negotiations | 8 | 40 |
| 8 | CIII Taxation | 8 | 25 |
| 9 | CIII Governance and Due Diligence | 7 | 35 |
| 10 | CIII Ecosystem | 5 | 25 |
| 11 | CIII Indices and Benchmarking | 4 | 20 |
| 12 | CIII Modern Portfolio Theory and Capital Market Theory | 4 | 20 |
| 13 | CIII AIFs in India and Suitability | 3 | 15 |
| 14 | CIII Investment Landscape | 3 | 15 |
| 15 | CIII Types of Investments | 3 | 15 |
| Total | 107 | 500 |
Marks per chapter reflect the official NISM syllabus weightage. Practice question counts show the bank size in our app — use them to gauge depth of preparation needed per chapter.
Key Knowledge Areas
Overview
Series XIX-E is for AIF Managers specialising in Category III — long-short, market neutral, multi-strategy, and other hedge-fund-style funds. It complements XIX-C (all categories) with deeper Cat III content.
At a glance: 100 questions · 2 hours · 60% pass mark · 0.25 negative marking · ₹1,500 + GST.
Who should take XIX-E
- Principal officers / CIOs at Cat III AIF managers
- Senior portfolio managers running long-short / multi-strategy funds
- Risk officers at hedge fund-style entities
Key Knowledge Areas
Cat III strategies in depth
| Strategy | Mechanics |
|---|---|
| Long-short equity | Long undervalued, short overvalued; net beta varies |
| Market neutral | Net beta ≈ 0; returns from alpha alone |
| Event-driven | M&A arb, distressed, special situations |
| Macro / multi-strategy | Top-down, multi-asset |
| Quant / systematic | Algorithmic, factor-based |
Modern Portfolio Theory & CAPM
Heavy weight (~12 marks). Topics: efficient frontier, mean-variance optimisation, CAPM, multi-factor models, risk decomposition.
Risk frameworks
Cat III managers run more sophisticated risk:
- Value-at-Risk (VaR) — daily / weekly
- Stress testing — 2008-style scenarios
- Liquidity at risk — exit feasibility
- Counterparty & operational risk
Cat III taxation
Cat III is taxed at fund level (unlike Cat I/II pass-through):
- Equity STCG 20%, LTCG 12.5%
- Other income at maximum marginal rate
- Distributions to investors generally tax-free post fund-level tax
Indices & benchmarking
Tracking error, information ratio, and active risk. Comparing Cat III strategies against appropriate benchmarks (long-short equity vs Nifty 50 long-only is misleading).
Leverage discipline
SEBI permits up to 2x leverage for Cat III. Manager must report leverage daily, maintain margin discipline, and ensure ample liquidity.
Exam Tips
Tip 1: MPT and CAPM formulas and interpretations are guaranteed. Memorise efficient frontier, capital market line, security market line.
Tip 2: Cat III taxation — fund-level — vs Cat I/II — pass-through — is the most-tested distinction.
Tip 3: Risk metrics (VaR, stress test, drawdown) appear in 8+ marks. Know definitions and interpretations.
Tip 4: SEBI Cat III specifics — 2x leverage, daily NAV, valuation requirements — recur.
Try the Free Quiz
Test your knowledge with our free XIX-E practice quiz — or get the full bank of 500+ XIX-E questions plus mock tests in the NISM Exam Prep app.
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