MFs set the ball rolling to enter specialised investment fund arena

At least seven AMCs planning entry into this new product segment this year

Mutual funds (MFs) are gearing up to venture into specialised investment funds (SIFs) even as more clarity is awaited around key guidelines and the application form.

 

Several prominent asset management companies (AMCs), ranging from large- to mid-sized players such as Nippon India, Axis, Mirae Asset, Edelweiss, and Union, have revealed plans to introduce products in this emerging space.

 

The list of AMCs eyeing SIF foray also includes ICICI Prudential and DSP. Collectively, these firms oversee nearly ₹23 trillion in assets.

 

AMCs are at varying stages of preparation for this new vertical.

 

"At Edelweiss MF, our robust in-house research and investment capabilities across equity, debt, and factor strategies give us the confidence to evaluate this space strategically. We have started exploring and working on some strategies, which we will launch in the first phase this year," said Radhika Gupta, MD & CEO, Edelweiss Mutual Fund (MF).

 

Vaibhav Shah, head of products, business strategy & international business at Mirae Asset Investment Managers (India), also said: “We’re building teams and refining processes to roll out SIFs, having identified a few product offerings, we’re eager to launch this year.”

 

While some fund houses plan to leverage existing resources, others are tapping talent from the alternative investment fund (AIF) ecosystem.

 

For instance, Axis AMC and Nippon Life India AMC have recruited senior executives from Avendus Capital Public Markets Alternate Strategies to spearhead their SIF initiatives. While Avendus CEO Andrew Holland has joined Nippon, its CIO Nandik Mallik has moved to Axis.

 

SIFs represent a high-risk category within the mutual fund space, targeting sophisticated investors with a minimum investment of ₹10 lakh. These schemes will offer complex strategies, including long-short positions across equity, hybrid, and debt segments.

 

Although the regulatory timeline set April 1 as the start date for SIF operations, industry officials suggest launches may be delayed by weeks due to pending application forms and scheme information document (SID) formats. Recent clarifications from the Securities and Exchange Board of India (Sebi) have addressed some uncertainties — exempting SIFs from rules governing MF interval schemes and confirming that AMC officials’ investments under “skin-in-the-game” norms need not meet the ₹10 lakh threshold.

 

Meanwhile, as established players solidify their SIF strategies, prominent names from the portfolio management services (PMS) and AIF domains — such as Nuvama Wealth Management, Marcellus Investment Managers, Wealth First Portfolio Managers, and ASK Investment Managers — have applied for MF licences, with some explicitly focusing on SIFs as their entry point. 

Expanding the horizon

Product possibilities in SIFs

Equity long-short fund

  Equity ex-top 100 long-short fund

  Sector rotation long-short fund

  Debt long-short fund

  Sectoral debt long-short fund

  Active asset allocator long-short fund