EPFO Gets Central Board's Nod To Invest Up To 5 Per Cent Of Annual Deposits In InvITs, Alternative Funds: Report

The Employees’ Provident Fund Organisation (EPFO) will be investing up to 5 per cent of its annual deposits in alternative investments including infrastructure investment trusts (InvITs), reports MoneyControl.

The central board of the EPFO has approved the proposal to invest in alternative investments.

The move will be diversifying the investment basket of the EPFO as the central government had already permitted investments in alternative investment funds (AIFs) earlier this year.

Sunil Barthwal, secretary of the labour and employment department, told Moneycontrol, “The board has given its go-ahead. We shall only focus on government-backed alternatives which are category one funds like public sector InvITs.”

The overall corpus of the EPFO has been growing which has necessitated the diversification of investments.

Moreover, the demand for long-term funds in the larger infrastructure space has also enhanced accordingly.

InvIT are regulated by the Securities and Exchange Board of India (SEBI) and allows infrastructure project developers to monetise their assets by pooling several assets under a single entity.

Small and medium-sized enterprises (SME) funds, social venture funds are some other alternatives in the category one segment of AIF that are also regulated by the SEBI.