In the AIF world, not all investors are equal. An anchor investor putting in _50 Crore might negotiate a Side Letter. This is a separate agreement granting them special rights, like reduced fees, a seat on the advisory board, or increased information rights.
While this seems unfair, these large investors often make the fund viable for everyone else. However, SEBI regulations ensure that side letters cannot offer terms that materially disadvantage other investors (e.g., they can’t get an earlier exit). ItÕs a balance of commercial reality and fairness.
