Shelf Placement Memorandum

A co-investment scheme lets accredited investors put in extra money. They invest alongside a Category I or II AIF, into a single investee company. This is over and above what they have already committed to the main fund.

Each co-investment scheme targets exactly one investee company. To launch one, the manager must file a fresh document with SEBI. This document is called the Shelf Placement Memorandum.

The workbook is specific about the mechanics: a shelf placement memorandum shall be filed with SEBI, through a merchant banker, along with the fee specified — and the fee for filing a shelf placement memorandum to launch a co-investment scheme is Rs 1,00,000.

A separate co-investment scheme must be launched for each co-investment, in accordance with the shelf placement memorandum filed with SEBI for that specific opportunity — the shelf filing is not a one-time, reusable authorisation across multiple future co-investments. Only accredited investors of the Category I or Category II AIF are eligible to invest in a co-investment scheme, each such scheme invests in only one investee company, and a co-investment scheme itself may not invest in units of AIFs. The terms of co-investment through the scheme must not be more favourable than the terms of the main AIF's own investment in that company. The workbook goes further on the way out: the terms of exit, including the timing of exit, shall be identical to the terms on which the Category I or Category II AIF itself exits. There is no provision anywhere in this paper letting the co-investment exit on its own schedule, so a question offering one is offering a distractor.

Meridian Growth Fund, a Category II AIF, identifies a follow-on investment opportunity in one of its portfolio companies that exceeds what the main fund can allocate under its concentration limits. It offers accredited investors in the fund the chance to co-invest an additional Rs 12 crore directly into that single company.

To do this, Meridian's manager files a shelf placement memorandum with SEBI, through a SEBI-registered merchant banker, paying the prescribed fee of Rs 1,00,000. Only investors in Meridian Growth Fund who separately qualify as accredited investors are eligible to participate in this co-investment scheme, and the Rs 12 crore raised may be deployed into that one investee company only — not spread across other opportunities, and not invested into units of any other AIF.

If, six months later, Meridian identifies a second, unrelated co-investment opportunity in a different portfolio company, it must file an entirely new shelf placement memorandum and pay a fresh Rs 1,00,000 fee for that separate scheme — the earlier filing does not carry over.

Chapter 4 (Regulatory Framework — Indian Context), section 4.1.5 (Co-investments), sets out the shelf placement memorandum requirement directly alongside the co-investment scheme conditions — accredited-investor-only eligibility, one investee company per scheme, and the Rs 1,00,000 filing fee. Expect the Rs 1,00,000 fee and the merchant-banker filing route tested as standalone facts, and the "one scheme, one investee company" rule tested against a distractor suggesting a single shelf filing can cover multiple future co-investments.

• The Rs 1,00,000 fee is per shelf placement memorandum, filed per co-investment scheme — a fund running several co-investments over time pays this fee separately each time, not once.
• Only accredited investors of the underlying Category I or II AIF may participate — an investor in the main fund who is not separately accredited cannot join the co-investment scheme.
• Each co-investment scheme is restricted to a single investee company — it cannot be used to pool money for a diversified set of follow-on opportunities.
• A co-investment scheme cannot itself invest in units of AIFs — its mandate is confined to direct investment in the one target investee company alongside the main fund.