The Securities and Exchange Board of India (Sebi)’s newly introduced asset class, called Specialised Investment Funds or SIFs, is set to fill a long-standing gap in the market. SIFs offer a middle ground for India’s growing class of investors who are underserved by both mass-market Mutual Funds (MFs)and high-ticket portfolio management services (PMS).
Sebi had released consultation papers on SIFs earlier, but the final framework was only issued on February 27, 2025, and SIFs were launched on April 1.
So far, only two Asset Management Companies (AMCs) have applied to launch SIFs, as per media reports. Mirae Asset Investment Managers (India) has launched ‘Platinum SIF’, and Edelweiss Asset Management launched ‘altiva SIF’.
Why Were SIFs Necessary
MFs cater largely to the retail investors as it allows investments as low as Rs 100 to Rs 500. Though many high-net worth individuals (HNIs) too invest in MFs. On the other hand, PMS are largely for HNIs as it requires a minimum investment of Rs 50 lakh. SIFs bridge this gap, as it offers investments starting from Rs 10 lakh.
Another reason why SIFs were necessary is the strict regulatory framework governing MFs in India. Under Sebi’s watchful eyes, MF investors are often at the mercy of portfolio managers and the fund’s specific strategy, all of which must operate within a strict set of guidelines and compliance rules.
On the other hand, unlike MFs, PMSs are subject to less rigorous guidelines and compliance. This allows portfolio managers to customise the portfolio for individual investors. This flexibility allows them to quickly switch to a different strategy based on changing preferences of investors. In other words, investors taking services of PMS have a more sense of control over their portfolios. This is where SIFs come into the scene, offering the best of both the worlds.
Who Can Launch SIFs?
Sebi has set clear guidelines for who can enter this space.
Established fund houses: The minimum requirement for established fund houses is that they should have been in operation for at least three years and manage average assets under management (AUM) of Rs 10,000 crore over the last three years, with a clean regulatory record.
New AMCs: New AMCs are required to hire a Chief Investment Officer (CIO) with over 10 years of experience and managing at least Rs 5,000 crore, to qualify. New AMCs are also required to appoint a Fund Manager with at least three years of experience managing Rs 500 crore or more.
Investment Strategies Allowed Under SIFs
SIFs can be set up as open-ended, closed-ended, or interval funds. The minimum investment required is Rs 10 lakh per AMC, applicable across all strategies. Following are the investment strategies that SIFs are required to follow:
Equity-Oriented Strategies:
Equity Long-Short Fund: At least 80 per cent of the fund must be in equities, with up to 25 per cent in short positions using equity derivatives.
Equity Ex-Top 100 Long-Short Fund: At least 65 per cent of the investment should go into stocks outside the top 100 by market cap, with up to 25 per cent in short positions.
Sector Rotation Long-Short Fund: At least 80 per cent must be invested in up to four sectors, with 25 per cent short exposure allowed at the sector level.
Debt-Oriented Strategies:
Debt Long-Short Fund: Invests in debt instruments with up to 25 per cent short exposure using debt derivatives.
Sectoral Debt Long-Short Fund: Invests in debt from at least two sectors but no more than 75 per cent in one. Maximum short exposure is 25 per cent.
Hybrid Strategies:
Active Asset Allocator Long-Short Fund: Invests across equity, debt, derivatives, REITs/InvITs, and commodity derivatives.
Hybrid Long-Short Fund: Minimum 25 per cent in both equity and debt, with up to 25 per cent in short positions.
