With continued inflows into equity mutual fund (MF) schemes despite growing economic concerns, major fund houses in India are preparing to launch Specialised Investment Funds (SIF), a high-risk, high-return strategy approved by the Securities and Exchange Board of India (SEBI) in February.
To differentiate SIFs from traditional MFs, SEBI has required Asset Management Companies (AMCs) to use distinct brand names and logos for SIF offerings. The country’s largest AMC, SBI MF, has chosen to enter the SIF market under its Magnum brand with the launch of the Magnum Hybrid Long Short fund. Similarly, Edelweiss MF has branded its entry as Altiva with the introduction of its Hybrid Long-Short Fund. Additionally, Quant MF has already launched two SIF products under its QSIF brand.
Mirae Asset Investment Managers has adopted the brand identity “Platinum SIF” for its SIF offerings. Bandhan AMC plans to enter the SIF segment under the name “Arudha SIF,” while Union MF is finalizing its SIF strategy, which is expected to be announced soon.
The Wealth Company AMC, a newer player in the mutual fund industry, is seeking SEBI approval to enter the SIF market through an alternative route. Although SEBI regulations typically require a minimum of three years of operation and an assets under management (AUM) of ₹10,000 crore for SIF ventures, there is a provision allowing new entrants to encourage competition.
This alternate route mandates that AMCs appoint a Chief Investment Officer (CIO) for the SIF with at least 10 years of fund management experience and a track record of managing an average AUM of ₹5,000 crore. Additionally, each SIF must have a Fund Manager with a minimum of three years of experience managing at least ₹500 crore.
Similar to traditional MFs, SIFs are designed for sophisticated investors comfortable with higher risks and complex investment strategies across asset classes, with a minimum investment threshold set at ₹10 lakh. SEBI has permitted three equity investment strategies and two each in debt and hybrid categories.
DP Singh, Deputy Managing Director & Joint CEO of SBI MF, noted that while derivatives markets may appear risky, they are complex and should be managed by experienced fund managers rather than attempted by retail investors. “Even pensioners can consider this product provided they have the risk appetite. We aim to receive at least 20,000 to 30,000 applications at the NFO stage,” he stated.
Radhika Gupta, MD & CEO of Edelweiss Asset Management, mentioned that investors could expect returns similar to arbitrage or fixed income plus returns by investing in the SIF. Although both Edelweiss BAF and Altiva Hybrid Long Short Fund utilize hybrid strategies, the BAF maintains an open equity exposure of 30–80 percent, while Altiva will primarily employ tactical long-short equity trades, aiming to mitigate the overall risk associated with open equity investments.
