ET Wealth Expo| SIF bhi sahi hai’: Anshu Kapoor sees new investment vehicle attracting top fund management talent

Specialised Investment Funds (SIFs) could emerge as an important new avenue for investors seeking access to sophisticated investment strategies, with the category also likely to attract top fund management talent, said Anshu Kapoor, President and Head of Nuvama Asset Management.

Speaking at the ET Wealth Expo, Kapoor said the new product category could help bridge the gap between traditional mutual funds and alternative investment products that were earlier accessible largely to wealthier investors.

“SIF bhi sahi hai,” Kapoor said, adding that the new category should be seen as an additional investment option rather than a replacement for mutual funds.


Explaining the potential of SIFs, Kapoor said the regulator has introduced a product structure that allows investors to access a wider range of investment strategies and tools through a relatively familiar fund structure.

According to Kapoor, one of the key advantages of the new vehicle is that it can offer investors the governance structure and ease of access associated with mutual funds, while allowing fund managers to deploy a broader set of strategies.

He also highlighted the role of derivatives in portfolio management. While derivatives can be risky when used for speculative trading, they can also serve as useful tools for hedging, protecting portfolios and managing risk, Kapoor said.

The minimum investment requirement of Rs 10 lakh could also make such strategies more accessible to a wider pool of investors. In comparison, alternative investment funds have traditionally required significantly larger minimum investments, making diversification across such products difficult for many investors.

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Kapoor believes the category could also draw more professional talent as it develops.

“Until now, a lot of this talent worked with prop books or prop funds or banks with those kinds of ideas. As this becomes larger, a lot of professionals will want to come into this category,” he said.

This, in turn, could lead to the development of more investment products catering to different risk profiles and investment objectives.

Kapoor said SIFs could potentially offer strategies ranging from lower-risk and lower-volatility products to those designed for investors willing to take higher risks. The category could also provide fund managers with more flexibility in areas such as asset allocation and risk management.

Drawing on Nuvama Asset Management's experience in managing Category III AIF strategies, Kapoor said the firm's track record demonstrated that it was possible to reduce portfolio volatility while capturing market returns.

He said one such strategy had brought volatility down compared with the Nifty while outperforming the index on a compounded basis. However, he noted that the new SIF structure could offer investors the additional benefit of a more tax-efficient investment vehicle.

Kapoor said the category was still at an early stage and could evolve further as regulators and market participants gain more experience.

“Our interaction with SEBI tells us that this is step one. They are watching, they are learning like we are learning and watching, and more categories will come as we go ahead,” he said.

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For investors, however, Kapoor's message was to first understand the product and seek professional advice before investing.

“I would say please explore, please learn, please talk to your relationship managers, distributors, but do try and experiment with this product category,” he said.

With SIFs opening the door to a new set of investment strategies under a regulated fund structure, Kapoor said he remains positive about the potential of the category and its ability to attract both investors and professional fund management talent.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)