GIFT City gains traction: Avendus fourth firm to get nod for setting up AIF

Avendus Capital, India’s largest player in the alternative investment fund (AIF) industry with 30 per cent market share, last week became the fourth firm to receive a licence from the International Financial Services Centres Authority (IFSCA) to set up at GIFT City.
 
The first such licence was issued to True Beacon, which was launched by Zerodha founders Nikhil Kamath and Nithin Kamath, along with high-profile investment banking industry expert Richard Pattle. This was followed by Kedaara Capital and Multiples Alternate Asset Management.
 
And, according to an industry official tracking developments at GIFT City, four other companies’ applications are under are under consideration for setting up AIFs.
 
Speaking about the licence, Andrew Holland, chief executive officer of Avendus Capital Public Markets Alternate Strategies LLP, said: “The GIFT City IFSC based fund has assumed priority at Avendus. We have just last week secured a licence and we are aiming to launch the first fund in October. Despite the current Covid-related uncertainties, we aim to manage around $500 million worth of assets in the next 2-3 years. Our India AUM (assets under management) is around Rs 4,000 crore ($545 million).”
 
Avendus’ hedge fund will have long and short strategies and the money it raises will be invested in Indian financial markets.
 
Around four fund managers/advisors have already received approval; SBI Funds Management, ASK Investment Managers, and Phillip Capital are setting up portfolio management services. Nippon Life India Asset Management application for fund managers/advisor is under consideration.

There are several others in the fund industry ecosystem at GIFT City whose licences are under consideration.
 
Holland added that GIFT has several advantages over other fundraising destinations for investors looking at the Indian markets.
 
“Regulatory environments for offshore and onshore are in sync, most fund industry ecosystem players for Indian markets also have presence in GIFT IFSC including custodians, fund administrators, foreign investment service providers. Going forward, we see the fund industry gaining traction at this IFSC,” he said.
 
The IFSCA wants to see GIFT emerge as a hub for the fund industry.
 
“We are seeing great momentum in participation by institutions at IFSC. We have seen participation of around 30 players from the fund industry covering AIFs, fund managers, administrators, PMS entities. IFSC is becoming an important gateway for global investors,” said Dipesh Shah, head development, IFSCA.
 
Richard Pattle, who teamed up with Zerodha founder Nithin and Nikhil Kamath to set up True Beacon, said the AIF now serves clients across the world. “Our fund has been launched and we intend to raise $100-200 million initially under an AIF structure,” added Pattle, who is CEO of the firm.
 
“While operationally and from a tax perspective GIFT City has provided an excellent base, as the ecosystem grows in Gandhinagar, this measure will act as a catalyst to attract yet more international and domestic FIs, further accelerating inflows,” Pattle added.