Key Takeaways
- • Specialised Investment Funds (SIFs) in India reached assets under management of Rs 38,287 crore in September 2026, according to a report cited by The Federal, with assets growing nearly 19 times in less than a year.
- • SIFs require a minimum investment of Rs 10 lakh, limiting access to mass-affluent investors, HNIs, UHNIs, and potentially institutions and family offices.
- • Per AlphaGrep Mutual Fund CEO Bhautik Ambani, SIFs sit between conventional mutual funds and hedge funds, are capped at 25 per cent in naked short positions, and operate within a mutual fund platform that benefits from SEBI's regulatory and governance framework.
- • Hybrid strategies account for nearly 69 per cent of SIF assets, with net equity exposure varying from around 10-20 per cent to 30-50 per cent across funds, so risk profiles differ materially.
- • Ambani advises investors to prioritise evaluating the fund manager's derivatives experience and track record before assessing strategy, net exposure and derivative use.
Summary
Specialised Investment Funds (SIFs) in India are gaining traction, with assets under management reaching Rs 38,287 crore in September 2026, according to a report cited by The Federal. The vehicles are designed to bridge conventional mutual funds and more sophisticated strategies, and require a minimum investment of Rs 10 lakh under the applicable framework.
In an interview with The Federal, Bhautik Ambani, CEO of AlphaGrep Mutual Fund, described SIFs as occupying a space between what a mutual fund and a typical hedge fund can do. He noted that SIFs are capped at 25 per cent in relation to Alternative Investment Fund (AIF) limits, and that they are permitted to take naked short positions of up to 25 per cent, a key distinction from conventional mutual funds. Ambani said SIFs are not a replacement for hedge funds at present, and emphasised that managing long-short strategies and derivatives requires specialised skills and experience.
On eligibility, Ambani said the Rs 10 lakh minimum limits participation to mass-affluent investors, high-net-worth individuals, ultra-high-net-worth individuals, and potentially institutions and family offices. Depending on strategy, SIFs may serve as alternatives to fixed-income products, arbitrage strategies, hybrid funds, balanced advantage funds or equity allocations.
Ambani argued that the principal comfort for investors is governance: an SIF operates within a mutual fund house, and mutual funds are among the most regulated and closely supervised structures under SEBI licensing. He said he sees no other platform comparable to mutual funds on governance when set against portfolio management services or AIFs. On growth drivers, he cited a combination of factors, including the new toolkit SIFs provide, while stressing that investors should scrutinise derivative expertise, net exposure and the derivative strategies a fund deploys.
Hybrid strategies account for nearly 69 per cent of SIF assets. Ambani described the associated risk as arbitrage-plus, suitable for investors with a horizon of more than a year seeking returns above arbitrage funds. He cautioned that hybrid SIFs differ widely, with some operating at net exposure or net delta of around 10-20 per cent and others at 30-50 per cent net equity exposure, implying materially different behaviour across market conditions.
On downside risk, Ambani said his firm hedges a large part of systematic (market) risk by maintaining approximately equal long and short positions, relying instead on stock selection and active management to address idiosyncratic risk. He said a 5 per cent market move would not materially affect the strategy in his description.
Ambani advised first-time SIF investors to focus first on the manager's pedigree, track record and derivatives experience, then on strategy positioning, net exposure and risk levels. The article notes that its content is for information only and does not constitute investment advice.
In an interview with The Federal, Bhautik Ambani, CEO of AlphaGrep Mutual Fund, described SIFs as occupying a space between what a mutual fund and a typical hedge fund can do. He noted that SIFs are capped at 25 per cent in relation to Alternative Investment Fund (AIF) limits, and that they are permitted to take naked short positions of up to 25 per cent, a key distinction from conventional mutual funds. Ambani said SIFs are not a replacement for hedge funds at present, and emphasised that managing long-short strategies and derivatives requires specialised skills and experience.
On eligibility, Ambani said the Rs 10 lakh minimum limits participation to mass-affluent investors, high-net-worth individuals, ultra-high-net-worth individuals, and potentially institutions and family offices. Depending on strategy, SIFs may serve as alternatives to fixed-income products, arbitrage strategies, hybrid funds, balanced advantage funds or equity allocations.
Ambani argued that the principal comfort for investors is governance: an SIF operates within a mutual fund house, and mutual funds are among the most regulated and closely supervised structures under SEBI licensing. He said he sees no other platform comparable to mutual funds on governance when set against portfolio management services or AIFs. On growth drivers, he cited a combination of factors, including the new toolkit SIFs provide, while stressing that investors should scrutinise derivative expertise, net exposure and the derivative strategies a fund deploys.
Hybrid strategies account for nearly 69 per cent of SIF assets. Ambani described the associated risk as arbitrage-plus, suitable for investors with a horizon of more than a year seeking returns above arbitrage funds. He cautioned that hybrid SIFs differ widely, with some operating at net exposure or net delta of around 10-20 per cent and others at 30-50 per cent net equity exposure, implying materially different behaviour across market conditions.
On downside risk, Ambani said his firm hedges a large part of systematic (market) risk by maintaining approximately equal long and short positions, relying instead on stock selection and active management to address idiosyncratic risk. He said a 5 per cent market move would not materially affect the strategy in his description.
Ambani advised first-time SIF investors to focus first on the manager's pedigree, track record and derivatives experience, then on strategy positioning, net exposure and risk levels. The article notes that its content is for information only and does not constitute investment advice.
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