Key Takeaways
- • AlphaGrep Mutual Fund's first Specialised Investment Fund, the Eminence Hybrid Long-Short Fund, has a new fund offer closing October 28, 2026, with a minimum investment of Rs 10 lakh.
- • The fund targets 8 to 10 per cent annual returns with low market risk, against roughly 6 per cent for arbitrage funds and 6.5 per cent for equity savings funds, according to Bhautik Ambani, Director and CEO of AlphaGrep Investment Management.
- • A back-test shows about 10 per cent annual returns with volatility of 2 to 3 per cent, and the fund moved less than one-tenth as much as the market; the fund itself has no live track record.
- • The portfolio combines seven hedged strategies, or sleeves, that already run in AlphaGrep's Category III AIFs, including a long-short fund with a four-and-a-half-year record.
- • AlphaGrep plans to close the fund to fresh money once assets reach Rs 2,000 to 3,000 crore, as these strategies lose their edge at larger scale.
Summary
AlphaGrep, a quantitative trader that has used computer models to trade its own capital for 16 years, is applying those models to its first Specialised Investment Fund (SIF), the Eminence Hybrid Long-Short Fund. The fund is aimed at investors who currently park money in arbitrage funds. Bhautik Ambani, Director and CEO of AlphaGrep Investment Management, describes a SIF as "a mutual fund with a much larger toolkit." The new fund offer (NFO) closes on October 28 with a minimum investment of Rs 10 lakh.
According to Ambani, arbitrage funds have earned about 6 per cent a year over the last four to five years, with volatility near 1 per cent. Equity savings funds, the next step up in risk, earned about 6.5 per cent but took on more than four times the volatility. AlphaGrep's back-test indicates about 10 per cent a year with volatility of 2 to 3 per cent. The fund has no live record, so these figures remain hypothetical.
The structure relies on SIF rules that allow a fund to short up to 25 per cent of its portfolio without owning the underlying stock, which a conventional mutual fund cannot do. AlphaGrep uses this flexibility to run seven strategies, or "sleeves," which Ambani compares to a Gujarati thali, where no single dish carries the meal. The largest sleeve, usually 30 to 40 per cent of the fund, is a long-short equity book holding 150 to 170 of the roughly 200 stocks with futures, split roughly equally between long and short positions. A typical pair buys a strong bank and shorts a weak one. The other sleeves include covered calls hedged with protective puts, special situations such as merger arbitrage capped at 10 per cent, and short-to-medium-duration debt.
AlphaGrep manages or advises on about Rs 20,000 crore across the group, with more than 200 of its 500 employees in research. Ambani says all seven strategies already run in the group's Category III AIFs, and separate teams and servers keep fund operations apart from the firm's proprietary trading. He acknowledges that hedged funds can still lose money and that a year matching arbitrage returns would be a disappointment by his measure. The fund is intended for investors who can hold for at least a year and seek 8 to 10 per cent without equity market risk. Gains on units held more than a year attract only long-term capital gains tax, Ambani notes. He identifies the fund's performance in a falling market as the key test.
AlphaGrep has also said it will stop accepting fresh capital once the fund reaches Rs 2,000 to 3,000 crore, because the strategies lose their edge as assets grow. The Eminence SIF was launched under India's SIF platform, with subscriptions open October 14 to 28, 2026.
According to Ambani, arbitrage funds have earned about 6 per cent a year over the last four to five years, with volatility near 1 per cent. Equity savings funds, the next step up in risk, earned about 6.5 per cent but took on more than four times the volatility. AlphaGrep's back-test indicates about 10 per cent a year with volatility of 2 to 3 per cent. The fund has no live record, so these figures remain hypothetical.
The structure relies on SIF rules that allow a fund to short up to 25 per cent of its portfolio without owning the underlying stock, which a conventional mutual fund cannot do. AlphaGrep uses this flexibility to run seven strategies, or "sleeves," which Ambani compares to a Gujarati thali, where no single dish carries the meal. The largest sleeve, usually 30 to 40 per cent of the fund, is a long-short equity book holding 150 to 170 of the roughly 200 stocks with futures, split roughly equally between long and short positions. A typical pair buys a strong bank and shorts a weak one. The other sleeves include covered calls hedged with protective puts, special situations such as merger arbitrage capped at 10 per cent, and short-to-medium-duration debt.
AlphaGrep manages or advises on about Rs 20,000 crore across the group, with more than 200 of its 500 employees in research. Ambani says all seven strategies already run in the group's Category III AIFs, and separate teams and servers keep fund operations apart from the firm's proprietary trading. He acknowledges that hedged funds can still lose money and that a year matching arbitrage returns would be a disappointment by his measure. The fund is intended for investors who can hold for at least a year and seek 8 to 10 per cent without equity market risk. Gains on units held more than a year attract only long-term capital gains tax, Ambani notes. He identifies the fund's performance in a falling market as the key test.
AlphaGrep has also said it will stop accepting fresh capital once the fund reaches Rs 2,000 to 3,000 crore, because the strategies lose their edge as assets grow. The Eminence SIF was launched under India's SIF platform, with subscriptions open October 14 to 28, 2026.
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