Estee Advisors joins MF licence queue with eye on specialised funds

Estee Advisors, known for its quant-based PMS strategies, has applied for a mutual fund licence with plans to enter both regular schemes and SIFs for tax efficiency

Estee Advisors, a Gurugram-based investment manager that offers quant-based investment products in the portfolio management services (PMS) and alternative space, has applied for a mutual fund (MF) licence.

 

The company said that given its experience in managing derivative-based and long-only investment products on the PMS side, it will look to launch MF products across both segments — regular MFs and the newly introduced specialised investment funds (SIFs).

 

“Estee has run derivative-based PMS strategies for over 15 years. We also have regular long-only systematic investment strategies. We will carefully evaluate which strategies have the potential to perform well at scale and announce them at the right time. Our focus will be on active investment management,” said Sandeep Tyagi, founder and chief executive officer of Estee Advisors. 

 

 

The firm is among several MF licence applicants in recent months, many of whom are targeting the SIF space. The applicants are mostly PMS and alternative investment fund (AIF) firms, including Nuvama Wealth Management, Marcellus Investment Managers, Wealth First Portfolio Managers and ASK Investment Managers.

 

SIFs are being seen as a major competitor to PMS and AIFs. While SIFs will be similar to PMS and AIFs to an extent from a product perspective, they offer tax structure and ticket size advantages. The minimum ticket size for SIFs is Rs 10 lakh. In comparison, it is Rs 50 lakh for PMS and Rs 1 crore for AIFs.

 

In addition, SIFs will have a tax advantage, as they will not have to pay long-term or short-term capital gains (LTCG and STCG) taxes at the fund level, unlike Category-III AIFs. In the case of PMS, the investor has to pay capital gains tax whenever the fund manager makes a profitable trade.