Axis Mutual Fund, which was one of the early movers in the specialized investment fund (SIF) space, is planning to roll out its first fund in the category in the next two months.
Despite being one of the first fund houses to signal intent in the SIF space, Axis MF has trailed its peers in launching its product, making this announcement the first real sign of momentum in its SIF plans.
The Securities and Exchange Board of India (Sebi) introduced SIF, a product to bridge the gap between retail-focused mutual funds and portfolio management services that target the rich, in February.
The fund house hired Nandik Mallik to head its equity and hybrid SIF division in March and is yet to receive a licence to offer SIFs.
Axis MF is expected to be granted the licence to operate an SIF by the end of November, said a person familiar with the development.
“We will focus on categories that already exist in the market. Within our framework, the lowest-hanging fruit is arbitrage funds,” said Axis MF’s Mallik at an event on Tuesday.
Mallik noted that corporations and family offices are the primary investors in arbitrage funds at present.
He added that family offices are likely to make initial allocations to SIFs that establish a credible track record, following which high-net-worth individuals (HNIs) and corporates may increase their participation.
Each mutual fund must first secure Sebi approval to offer SIFs and then separate permissions for individual schemes.
The minimum ticket size for an SIF is ₹10 lakh, while that for a PMS is ₹50 lakh. SIF is designed for investors who are willing to take higher risks than those associated with a mutual fund.
So far, only a handful of fund houses have ventured into the SIF category. SBI Mutual Fund’s Magnum Hybrid Long-Short Fund, whose new fund offer (NFO) closed in October, mobilized about ₹1,000 crore.
Edelweiss Mutual Fund’s Altiva Hybrid Long-Short Fund also closed the same month, raising ₹320 crore. Meanwhile, Quant Mutual Fund’s Equity Ex-Top 100 Long-Short Fund wrapped up its NFO in November.
While Nippon Mutual Fund had applied for an SIF licence, Mirae Asset Investment Managers had announced the brand name for their SIFs.
