The End of the Commodities

After college, my first car was a Toyota Corolla hatchback. The engine was a nicely engineered piece of machinery. I wish I could say the same for the body panels, which quickly took on the look of rusty Swiss cheese; the holes widening year by year.

Thanks to such episodes, carmakers began using galvanized steel – the body panels "hot dipped" in a molten bath of corrosion-resistant zinc.

But car companies in two of the world's most populous countries did not get that memo. At least, not until recently.

The result? A huge bullish stampede into the zinc market at a time when many of the world's leading analysts least expected it …

Bloomberg's recent headline "China's Rusty Cars Set to Sustain Rally for 2016's Top Metal" says it all. So does the reaction in zinc prices, up 60% since the start of this year.

Only about one-third of the 19 million cars and trucks made in China last year were built with galvanized steel.

It's much the same in India, where consumers bought a record 2 million vehicles last year; only about 20% were made with galvanized steel, according to India's Institute of Technology Bombay.

When you think about vehicle sales forecasts in either country by 2020 (24 million in China, 5 million in India), that's a lot of zinc.

Don't Look Now, But …

My point isn't to run out and buy zinc-mining stocks. It's just to note that demand for commodities often materializes in ways no one expects until the rise in prices makes it all too obvious.

Take a look at what's happening with nickel.

The Philippines are a major supplier of raw nickel ore. The new Duterte administration, which took office over the summer, is in the middle of a "review" of the nation's three dozen or so mines, threatening to put some out of commission for alleged environmental violations.

That's not exactly "love," but it certainly helps the case for loving the ongoing run in nickel prices. Analysts at UBS Group AG see nickel prices rising another 25% next year (after the 20% gain so far this year).

Out of all the major industrial metals, copper is one of the most widely watched. The price of the red metal barely moved all year. It's down 50% since 2011.

Yet Japan's largest producer, Pan Pacific Copper, sees the price rising 40% to roughly $ 7,000 a ton by the time 2020 rolls around. Citigroup recently made a similar forecast. Why?

It's all about supply and demand.

Copper demand has remained relatively firm, even though economic growth in China – the world's No. 1 consumer of copper – has slowed in recent years.

But copper supply is another matter completely.

Late last year, Glencore – one of the world's largest copper miners – decided to mothball its largest mines in Africa, taking up to 400,000 tons of copper production off the global market. In Chile, the single largest supplier of copper in the world, the state-run copper commission announced big investment cuts through 2025, eliminating eight mine-development projects worth nearly $ 23 billion.

Now you can see where these copper-price projections came from. At Citigroup, analysts see widening deficits between copper supply and demand. At the aforementioned Pan Pacific Copper, the company's president said, "Output will fail to keep pace with demand because of the absence of new mine supply – unless prices reach $ 7,000 [per ton]."

With the price of copper below $ 5,000 a ton right now, that provides a lot of leeway for potential profit – and yet another reason to keep a close eye on this class of "most hated" commodities.

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What Does A Digital Bass Processor Do?

If you are to look at any system that has a serious car stereo in it you will most likely notice that most have a digital sound processor. The first time I saw one of these I thought it was just an overpriced bass boost, and that my current amp would do basically the same thing. Little did I know that a bass processor is much more than a bass boost.

A bass processor is installed before any crossovers or signal processors. So it would be hooked up right after your in dash unit. Always install before your crossover. At first you might think that a bass processor would be just for bass heads. This is not the case a bass processor can also improve the low end sound of all music from classical to rap. So what exactly does it do?

A good bass processor contains a circuit that accurately recreates and injects low frequency information back into the signal, giving your bass more impact. A bass processor will also allow you to customize this low end power to your specific vehicle. It does this by allowing you control the para-bass functions. What this does is allows you to adjust the sweep and the width of the bass.

The sweep will let you pick a certain frequency you want the bass restoration circuit to maximize. Having a lower sweep the bass will be centered around lower frequencies. While having the sweep higher means it will be centered around a higher frequency. While the width allows you to control how wide of a frequency range it will effect. If you have the width low the bass will be centered around a smaller frequency range, and turning this up higher will increase the frequency range.

So with all this bass processing going on you might be worried about your expensive subwoofers. I know that is something I was worried about when I first installed a "epicenter" by Audio Control a popular bass processor. I was mainly worried about the subsonic frequencies that can damage your stereo equipment.

If you look at any good bass processor will come with what is called subsonic filter. Subsonic frequencies are those that are not audible to the human ear. Sound frequencies that are below 20Hz are considered subsonic. A good bass processor will have a subsonic filter that will make sure you don't waste your car stereo power on this subsonic information and will make sure you are putting all of your systems power to good use.

A subsonic filter is a huge feature to being able to fine tune your bass response. On most systems setting this filter at 33Hz will be good. If you want to protect you're your speaker system even more though you can try a higher frequency. Often a higher frequency will sound louder and cleaner.

So whether your interest is in Beethoven's kettle drums, Miles Davis' trumpet, or the percussion of rap music, a digital bass processor will restore those long lost bass notes.

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How To Sell Digital Products On Bonanza

Digital product authors and licensed resellers have sold their products on eBay for many years. Sadly, for the past couple of years eBay has made this abstract more difficult. This is due to their restrictions on the sale of digitally downloaded products. As a result many digital product sellers have been forced to find an alternative.

Bonanza fit the bill perfectly!

If you're not familiar with Bonanza, it's an online auction site very much like eBay. Bill Harding founded Bonanza in 2007. Today there are over 20 million items for sale on Bonanza. These item listings are available to nearly every country in the world. Among these items are, naturally, digitally downloaded products.

Digital products are not only fully supported on Bonanza, the digital delivery to your customer is also handled. When your product is purchased and payment completed, the buyer is able to download the product immediately.

The ability to easily list digital products, has made Bonanza one of the top venues for selling downloadable software, eBooks, plugins and more.

Listing your digital downloads is easy

  1. Register a sellers account on Bonanza.
  2. Once your account is active, login and go to your seller's dashboard.
  3. Set up your seller booth, following the provided instructions / suggestions.
  4. Select items, then add or edit items. This will open your listings page.
  5. Select add an item. This will take you to the listing creation page.
  6. Complete the Give Your Item A Title Field.
  7. Next you will upload your product images.
  8. In the item category field, select Digital Goods, then type of item from the list of options.
  9. Enter the number of items available in the Quantity Available field.
  10. Complete the Detailed Item Description field.
  11. In the Shipping Selection field you'll upload your digital file. (.zip file)
  12. Set a price for your item.
  13. Click the, Add This Item To Your Booth button.
  14. You'll receive confirmation that your listing is now live.

That's all there is to it. When your item sells, payment will be added to your PayPal account, the buyer will be able to download the item immediately. All of this is handled automatically, with no additional action required from you.

Another great feature of Bonanza is the Rewards Program. You earn reward tokens for just about every action you perform on Bonanza. Logging in and listing items are just a couple ways you earn tokens. These tokens can be used for fee discounts, listing promotion and more.

There are many other great venues for selling digital products online. However, if you sell digital products, Bonanza definitely ranks among the best. Even if you currently sell on other sites, don't overlook Bonanza!

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Using Social Media for Website Marketing Strategies

Social media is a great resource to use in nearly all website marketing strategies. It's easy, it's cheap, and it's a fun way to reach your audience. There are so many benefits to web 2.0 marketing, not the least of which is that you don't have to worry as much about making search engine rankings.

Social Media for Social Interactions

One of the greatest things about social media is that it puts a personal face on you, the business person. All too often, people think of business owners as being "not real people," and you can display this side of yourself through social websites. Of course, as with anything on the Internet, you'll want to keep your reputation in mind with every status update.

It's perfectly fine to sometimes mention how run down the hotel in which you are staying is, but don't make complaining a habit. You should keep your content mostly focused on your work, although it's always nice to throw in a bit here and there about how great your family's vacation in Florida went. Above all, avoid religion and politics. Pursuing these subjects will inevitably cost you business.

Online Internet Marketing Strategies Using Social Media

For Online Internet Marketing strategies, using social media means walking a fine line between being a "legitimate" business and being spammer. Social marketing requires walking that line – you have to promote your business, but you don't want your status updates to be completely single minded.

Unfortunately, there's no sure way to predict when or if you're going to be labeled as a spammer. Many people don't know the difference between spamming and regular advertising. You can, however, observe some updating strategies that will make it be less likely.

As mentioned before, don't make all status updates link back to your site. That is the very definition of spamming. Instead, make observations about your niche, post your favorite inspirational quotes, and maybe throw in an occasional "just for fun" link. You can also link to the blog on your website to get people there without raising too many spam hackles.

Cyber ​​Marketing Strategies and Social Media

There are two major benefits of using social media in cyber marketing strategies. First of all, you can use it to build relationships with your potential and current clients and direct them to your site. You can also, if you're using the right social communities, build backlinks to your website through them.

Some of the major social community websites use a "no-follow" tag with the hyperlinks on their site. What this ultimately means is that they've disabled the ability for websites to increase their search engine rankings by linking to them from the social sites. These websites, Facebook and Twitter especially, are mainly useful for directing tons of traffic.

There are other social websites, such as Digg and StumbleUpon, that don't use "no-follow" tags. These are the ones that you can use for backlinks. They can also be used to direct traffic to your site, but they're not as beneficial as the more popular social sites.

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Linux Reseller Hosting Vs Windows Reseller Hosting

Within the last few years, the dynamic forces of websites have changed drastically due to the introduction of web hosting services. Web hosting services come with different types of features and you can choose from various options depending on your requirement. Windows Re-seller Hosting and Linux Re-seller Hosting are the primary two services that have become quite popular. Though these may seem similar to some extent, there are small differences that you can find.

In today's world, the internet is one of the best resources that you can utilize. Thus, many people opt for running their online businesses and earn a huge amount of money through different activities that on the internet. Some of these people are choosing re-seller hosting business as well. You can start a hosting business without much technical knowledge. Most of the parent companies offer huge bandwidth but the end users often don't need that much bandwidth. Here come the re-seller hosts who work as a bridge between the customers and the parent company. They buy a huge amount of bandwidth at a time and distribute it among the customers as per their needs.

There are quite a number of web hosting organizations that encourage the business of reselling hosting so that these companies can grow their businesses along with the reseller hosting company. Generally, the parent hosting company has a technical team that can handle any technical difficulties with expertise. Therefore, the hosting does not have any significant role in the operating associated with hosting. Many of you who are planning to select re-seller hosting services often get confused to choose from Windows Hosting and Linux Hosting because of the lack of technical knowledge.

Many users have been using Linux hosting for many years. On the other hand, many users who are true to Windows hosting have been using the service for long enough. The reason behind the satisfied customers is the uptime of both the hosting services. Both of Windows Hosting and Linux Hosting offer 99.9% uptime. Therefore, you can be sure that your website will be running 24×7.

The operating system that Windows Hosting and Linux Hosting use is the primary difference between the two of the hosting services. You must be careful about the operating system as you invest in resell hosting system services. Let's understand the difference so that you can make the decision based on the importance of the operating systems.

Operating system of both Windows Reseller Hosting and Linux Reseller Hosting:

The operating system of a server is by no means different from the one that you have on your computer. You have to make a choice between Windows OS and Linux OS. Some of you may be aware of the difference and those of you can make a choice depending on the requirements. However, if you don't have any clear idea about what web hosting is and how it works, the information will help you. Some of the differences between Windows Resell Hosting plans and Linux Resell Hosting plans are described below:

Customization :

The most basic difference between the two types of hosting plans is the options for customization. Though both the plans offer customization, the features offered by Linux is more flexible than that of Windows. Generally, the developers or admins prefer Linux Re-seller Hosting over Windows Re-seller Hosting. On the contrary, if you don't want to be the admin or if you aren't a developer, you can easily go for Windows Reseller Hosting plan.

Stability:

If you are concerned about the stability of your re-seller hosting plans, you can absolutely be stress-free as both Windows Reseller Hosting and Linux Reseller Hosting offer stability. Though Linux is more stable in comparison to Windows as it's an open-source platform, Windows also provides stability to a great extent. Linux has an ability to adapt to any environment and you can update and develop the reseller hosting plan based on your prerequisites.

Applications:

While using any reseller hosting plans, you must want to use different applications. Now, Windows Reselling Hosting and Linux Reselling Hosting offers distinct features while installing different applications. As Linux is an open-source platform, you get to enjoy many more features in comparison to Windows, which is a closed source platform. However, if you don't require more applications, you can always go for Windows. Basically, it depends on the needs of the customers which service plan they should choose.

Besides, you must keep in mind that the applications should be compatible with your installer operating system. Some applications may perform well when installed on Linux but the same may fail to run on Windows or vice versa.

Security:

If you are about to invest in re-seller hosting service, you may want the plans to provide you utmost security. Between Windows Hosting and Linux Hosting, Linux offers better security given to the fact that it is an open-source platform. On the other hand, though Windows is secure, it is more prone to getting attacked by viruses and malware.

Cost-efficiency:

If you are determined about investing in hosting services, you can choose any of the Windows Reseller Hosting and Linux Reseller Hosting Plans. Both of these plans are cost-effective. However, you must remember that you may need to expend a little more for Windows as the operating system and the features aren't free. On the contrary, Linux gives you the opportunity to use the operating system without any cost. You have to pay only for the features, which reduces the cost to the minimum.

Configuration:

Configuration is a vital part of installing re-seller hosting as the configuration of the system can activate and deactivate the installed applications. If you are concerned about the complexity of the configuration, you can go for Windows Reseller Hosting services as it is less complicated than Linux Reseller Hosting service. Besides, it takes only a few minutes to configure Windows, whereas, it may take hours if you try to configure Linux.

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Practical Guide to Ubuntu Linux – Tutorial for All

Whether you are an end user, a system administrator, or a little of both, this book explains with step-by-step examples how to get most out of an Ubuntu system. The book is designed for a wide range of readers, appropriate for:

  • Students
  • Home Users
  • Professionals
  • System administrators
  • Computer Science

A " Practical guide to Ubuntu " gives you a broad understanding of many facets of Linux. No matter what your background, this book provides the knowledge you need to get on with your work. This book explains how to use Linux from graphical interface and from the command line. This book is designed so you can get the most out of it in the least amount of time. You do not have to read this book straight through in page order. Look up a topic of interest in the table of contents or in an index and read about it. The book includes many pointers to Web sites where you can obtain additional information.The Linux operating system, which was developed through the cooperation of many, many people around the world, is a product of the Internet and is a free operating system. In other words, all the source code is free. You are free to study it, redistribute it, and modify it. As a result, the code is available free of cost-no charge for the software, source, documentation, or support.

A rich selection of applications is available for Linux-both free and commercial-as well as a wide variety of tools: graphical, word processing, networking, security, administration, Web server, and many others. Large software companies have recently seen the benefit in supporting Linux and now have on-staff programmers whose job it is to design and code the Linux kernel, GNU, KDE, or other software that runs on Linux. Also is important to users is the amount of software that is available-not just source code (which needs to be compiled), but also pre-built binaries that are easy to install and ready to run. These programs include more than free software. Netscape, for example, has been available for Linux from the start and included Java support before it was available from many commercial vendors. Its sibling Mozilla / Thunderbird / Firefox is also a viable browser, mail client, and newsreader, performing many other functions as well.

All this is only one small parted of book. Chapters covered in this Book:

  • Installation
  • Working with Ubuntu Linux
  • System administration
  • Security
  • Clients and servers
  • Programming
  • Etc.
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What is Cardboard Engineering? From Box Making to POS to Hobby to Interactive Marketing Products

What is cardboard engineering? The term doesn’t exist on Wikipedia. Web searches for “definition of cardboard engineering” and other similar questions find no results. You will not find “cardboard engineering” on any US site (they call it paperboard but “paperboard engineering” cannot be found either.) And yet, if you put “cardboard engineering” into Google.com it reports over 3,000,000 results, whilst a search for “cardboard engineers” produces 1,740,000 results.

So, back to the original question – what is cardboard engineering? In order to find out, let’s take a look at these diversified examples – all producing quite different things but each area describing itself as being involved in cardboard engineering.

Companies who make cardboard boxes and packaging employ cardboard engineering skills to create products which might range from a fairly ordinary rectangular box to a highly innovative product to act as a presentation pack. The term “cardboard engineering” also seems to cover closing mechanisms with names like crash lock bottoms, side panel locks and tuck lock tops.

Companies involved in producing point of sale products also utilise cardboard engineering techniques in the design of POS units from giant floor standing displays to counter top dispensers. Larger POS companies employ highly sophisticated CAD design systems, cutting plotters and large format printers in their design departments and work in a variety of materials which can include corrugated board, display board and folding box board.

There are lots of cardboard engineers who utilise their skills as a hobby, creating models and automata. This group is closely related to others with crafts and hobby interest in paper engineering, card making, making books by hand and origami. These groups actually account for the largest numbers of participants with millions of world-wide enthusiasts.

However, there is one area where cardboard engineering can create quite a stir – particularly in the world of Business to Business promotional marketing. Using a combination of skills gleaned from the various worlds of paper engineering, promotional packaging, paper crafts, structural packaging and the technology involved in designing pop-up books; the cardboard engineered items produced for the promotions and advertising market are perhaps the most intriguing.

Products in this area have the most amazing movements. There are pop-up products which are powered by rubber bands which come in all shapes and sizes. They are often used in direct marketing and jump out of the mailing pack to give the addressee a big surprise. There are other products with really sophisticated movements that grow bigger when opened or they can turn and spin. There are many interactive products designed to hold the interest of the B2B customer. One UK company with a large range of examples such as these is Whitney Woods.

So, what is cardboard engineering? Well, having taken a long, hard look at the top results for the search of “cardboard engineering”, it seems to boil down to a term that covers the design of any three dimensional object that is made out of cardboard – from boxes and display units to making models and to producing promotional advertising products.

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What Is Industrial Photography and Why Is It Important?

What is Industrial photography and why is it important?

In the world of business today photography is worth a million words. Everything from websites to brochures and television advertisements rely on high quality pictures to get a business's message across. Industrial photography is a specialized field of photography which makes it possible for businesses to communicate with customers and other businesses showcasing their industrial process, machines, and techniques. The photographs not only need to be shiny with balanced hues and highlights but also need to effectively communicate the meaning of the photograph in less in a second. This is why these types of photographs require a skilled photographer with years of experience photographing industrial machinery, locations and manufacturing processes.

The importance of an industrial photographer

An expert will be able to take photographs which are interesting and showcase everything you want from every angle leaving no questions in the mind of the person looking at the photograph. He or she should have an eye for detail and be able to generate interest out of everyday / normal machines. This means that the photos need to be more like a piece of art rather than just specialized images. For instance an expert will photograph an everyday, regular and ordinary conveyor belt in a way which would generate interest by highlighting specific areas and blurring out the background. These images when laid out on commercial advertising material like a brochure or a PowerPoint presentation will tell the story of the process.

Enhancing your online image

Apart from physical posters and brochures the right images will enhance your professional image online. A website displaying top notch photographs of every industrial process the business is involved in will add credibility and interest in the mind of the viewer. This in turn will help a business earn a lead, sell a product or be able to improve its image as a business online. Photography of machines and processes for each medium ie internet and print is slightly different. It requires a slightly different approach but an expert with years of experience will know which approach to take in order to ensure that the pictures communicate exactly what the business needs to get the desired result. This is why it is important for business owners to hire photographers who have experience and with a diverse portfolio.

Hiring an industrial photographer

Industrial photography is serious business and so you shouldn't leave it to an amateur to do the job and expect great results. Always look through a photographer's portfolio to make sure that he has taken great photographs in the past. Ideally, he should have a diverse portfolio which would then mean that he is able to take photographs for both your website and print campaign.

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How Long Should You Follow a Diet?

When you start a diet, the goal is not to lose weight as quickly as possible and then stop. A diet should be a learning process for a healthy diet. The question then is: how long should you follow a diet?

In this article, we tell you how long you should follow a diet and when you should stop. That is necessary to know because many people have no idea. When it comes to diets, people mainly think of

  • hunger
  • willpower
  • fatigue

From the moment we start a diet, we focus on the day we think we can achieve our goal. Then we want to resume our old eating habits. This is of course not wise.

We will therefore not only explain below how long you should follow a diet, but we will also discuss how you can continue your healthy diet after you have reached your ideal weight.

The weight that you should lose
The first thing you should know if you decide to follow a diet is how much weight you should lose. You can calculate this yourself with the BMI. For this, you only need your own weight and height and then you can determine your ideal target weight.

It is also important that you have this checked by a specialist or the doctor. These experts will guide you and help you find your ideal weight.

You should use your BMI as a recommendation and not become obsessed with it. Use it to create a healthy lifestyle and find your own well-being.

Once you start a diet, remember that you should not lose more than a pound a week. So forget all those wonderful diets. Instead, you need to lose weight slowly and constantly. That is the only way to prevent a kickback.

Instead of dieting, just learn to eat healthier
A diet is much more than just losing weight. It is also:

  • learn to eat healthy
  • sports
  • value the benefits of weight loss

You may think that it is difficult to achieve your goal, but in reality, you can continue to enjoy good food. Learn new recipes, find new products and add a routine with exercises to your daily life.

Mind you, we do not mean that you should continue to diet for the rest of your life. Once you have reached your ideal weight, you can relax a bit. You don't always have to be strict with yourself.

Yet that does not mean that you have to fall back on your old diet, because then your diet will ultimately prove to be meaningless. Try to find the golden mean, so that you can keep your weight and thus spoil yourself now and then.

Exercise is good
If you start a new sport while following a diet, find a workout that suits you. Then you stay in shape and you escape the daily stress for a while. There are many sports that you can do. So choose one. This is great fun if it is an activity that you can do together with you:

  • partner
  • friends
  • family

How long should you follow a diet?
Do you already know how long you should follow a diet? As we have said, a diet does not have to have a definitive end. However, they do have a point where you must stop and that is usually when you have reached your ideal weight.

We are all different and that is why you can lose more weight one week than the next. If you lose less weight, it could be due to:

  • whether your week is busy or relaxing
  • hormonal changes
  • many other factors

Do not start on a strict diet
In any case, you should never start a strict diet if you want to lose a specific amount of weight per week. The important thing is that you remember to never stop trying to lose weight.

Once you follow a diet, it does not matter if you reach your goal a few weeks later. You should also not follow a too-strict diet whereby you may not, for example, do the following:

  • consume different types of food
  • eating out with your friends
  • visiting family parties

It is not forbidden to stop your diet sometimes, as long as you start again, that is always the most important thing!

Moreover, a strict diet will only discourage you and it will not give you the strength to continue. It may be effective in the first few weeks, but we don't recommend it. In the long term, it is not sustainable.

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Alternative Investment Fund Regulations

What is an Alternative Investment Fund (AIF)

AIF is an Alternative Investment Fund Regulations privately pooled investment vehicle which collects funds from investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors. AIF may be in the form of a trust or a company or a limited liability partnership or a body corporate.

Why AIF

AIF Regulations endeavor to extend the perimeter of regulation to unregulated funds with a view to ensuring systemic stability, increasing market efficiency, encouraging the formation of new capital and consumer protection.

Who are not covered

Currently, the AIF Regulations do not apply to mutual funds, collective investment schemes, family trusts, ESOP and other employee welfare trusts, holding companies, special purpose vehicles, funds managed by securitisation or reconstruction companies and any such pool of funds which is directly regulated by any other regulator in India.

Categories of AIFs

An AIF needs to seek registration broadly under one of the 3 categories –

Category I AIF: The following are covered under Category I

1. Funds investing in start-up or early stage ventures or social ventures or SMEs or infrastructure

2. Other sectors or areas which the government or regulators consider as socially or economically desirable including the Venture Capital Funds

3. AIFs with positive spillover effects on the economy, for which certain incentives or concessions might be considered by SEBI or Government of India or other regulators in India

Category II AIF: The following are covered under Category II

1. AIFs for which no specific incentives or concessions are given by the government or any other Regulator

2. Which shall not undertake leverage other than to meet day-to-day operational requirements as permitted in these regulations

3. Which shall include Private Equity Funds, Debt Funds, Fund of Funds and such other funds that are not classified as category I or III

Category III AIF: The following get covered under Category III

1. The AIFs including hedge funds which trade with a view to making short term returns;

2. Which employ diverse or complex trading strategies

3. Which may employ leverage including through investment in listed or unlisted derivatives

Applicability of AIF Regulations to Real Estate Funds

After knowing what an AIF is and its broad categories, we analyze whether AIF Regulations are applicable to the Real Estate Funds

Firstly AIF has to seek registration under AIF Regulations under one of the three categories stated above. Therefore if a Fund does not fall under any of the three categories stated above, then it will not seek the registration with SEBI.

If we look at the Category 1, registration is required by funds which invest in start-up or early stage ventures or social ventures or SMEs or infrastructure

If we look at the definition of infrastructure, Explanation to Regulation 2 (m) states that Infrastructure shall be as defined by the Government of India from time to time.

And in the normal parlance, the term typically refers to the technical structures that support a society, such as roads, water supply, sewers, electrical grids,

telecommunications, and so forth, and can be defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions.

Therefore infrastructure does not include the real estate or construction activity since this activity deals in investing in land, developing the land by way of construction of flats, townships and other residential and commercial projects.

But if the real estate fund carries on certain projects for a social purpose like purchasing land for charity etc .; then the fund may be covered under social venture funds.

The clause further states that 'or other sectors or areas which the government or regulators consider as socially or economically desirable and such other Alternative Investment Funds as may be specified;'

The AIF Regulations have been notified just a few days back and till date, no other AIF funds have been specified in the Category 1 by the Government. Further what the government or regulators consider as socially and economically viable is a very broad concept. However, till the Government specifically comes out with specific inclusions under Category 1; a Real Estate Fund will not be covered under Category 1 and therefore would not require Registration.

Further, the clause also states that – Alternative Investment Funds which are generally perceived to have positive spillover effects on economy and for which the Board or Government of India or other regulators in India might consider providing incentives or concessions will bee included

By adding these lines to the Category 1, SEBI has made the category 1 very vague and open to dispute and litigations since what SEBI intends with positive spillover effects on the economy is not defined or clarified. Different people or organizations may have a different opinion on this which would lead to unnecessary litigations and hardships to business owners. However, till any clarity comes on this, the business owners need to take a cautious approach to the decision of seeking registration under AIF regulations.

Category II AIF

Now we examine whether a Real Estate Fund falls under the Category II AIF

If we look at the funds covered by Category II above, they

1. Shall not fall in Category I and III

2. Shall not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted by these regulations;

3. Shall be funded such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator

For Real Estate Fund under Category I, we notice that at present it does not fall under Category I and it also does not fall under Category III since these are basically hedge funds. Further, no specific incentives or concessions are given by the Government to the Real Estate Sector. Therefore if we look at the applicability of Real Estate Fund under Category II, these funds may fall under the Category II AIFs if they do not take leverage or borrowing except for short-term requirements.

Impact of AIF on the Real Estate Funds

Under these Regulations, the minimum investment amount has to be Rs 1 crore from each investor. Therefore attracting the funds from the investors would become tough for the real estate funds, who used to raise amounts as less as INR 1 million from the investors. Now they would need to find high-value investors though this is not the only challenge that lies ahead for those raising domestic corpuses. They now also have to invest 2.5% of the corpus or Rs 5 crore, whichever is lower, to ensure that the managing company risk is aligned with that of the investor. Moreover, a single investment in a company or a project cannot exceed 25% of the entire corpus.

Further a Real Estate Fund registered in the form of an LLP also would be covered under the AIF Regulations. In an LLP Structure, since the investors are also partners, the risk to the rights of the investors being misused is very minimum. Therefore applying the AIF Regulations to the LLP Structure would reduce the flexibility available to such a Structure.

Conclusion

If we look at the AIF Regulations from a short term perspective, in light of the difficult fund raising environment today, the higher ticket size for investors could possibly throw up some challenges and could in a manner constrict the growth of the asset class, but clearly , in the long run, these regulations appear to have an element of maturity to play a pivotal role in the development and shaping up of the future of alternate asset class in India. It is also clear that alternative investments are more sophisticated and risky as compared to investments in equity and debt and till market matures it is advisable that only HNIs and well informed investors make an investment in this asset class and once the market matures it is made open to all. In the long run, we may see more investments in the Alternative asset class (in terms of quantum and maturity) due to the increased investor confidence in these funds.

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