Frequently Asked Questions (FAQs) – SEBI Specialized Investment Funds (SIFs)

Everything you want to know about Specialised Investment Funds (SIFs)

1. What is a Specialized Investment Fund (SIF)?

   A Specialized Investment Fund (SIF) is a new category introduced by SEBI to bridge the gap between mutual funds and Portfolio Management Services (PMS). SIFs offer greater flexibility in investment strategies, allowing Asset Management Companies (AMCs) to cater to sophisticated investors with tailored investment approaches.

2. How do SIFs differ from traditional Mutual Funds and PMS?

   SIFs combine features of both mutual funds and PMS:

   a) Flexibility: Unlike traditional mutual funds, SIFs can employ strategies like long-short equity, sector rotation, and multi-asset diversification.

   b) Minimum Investment: SIFs have a lower minimum investment threshold compared to PMS.

   c) Regulation: While mutual funds are strictly regulated with standardized strategies, SIFs offer more customized approaches under SEBI's regulatory framework.

3. What is the minimum investment required for SIFs?

   Investors are required to make a minimum aggregate investment of ₹10 lakh across all SIF strategies under the same Permanent Account Number (PAN). This threshold does not apply to mandatory investments made by AMCs for designated employees.

4. What types of investment strategies do SIFs employ?

   SIFs can implement a variety of strategies, including:

   a) Long-Short Equity

   b) Debt Long-Short

   c) Sectoral Rotation

   d) Multi-Asset Diversification
   These strategies provide exposure to niche opportunities that traditional mutual funds may avoid due to their broader mandates.

5. Are there any specific requirements for AMCs to launch SIFs?

   Yes, AMCs must meet certain criteria to offer SIFs:

   a) Operational History: At least three years of operation with a minimum average Assets Under Management (AUM) of ₹10,000 crore.

   b) Experienced Leadership: A Chief Investment Officer (CIO) with over 10 years of experience managing at least ₹5,000 crore in AUM, and a Fund Manager with over 3 years of experience managing at least ₹500 crore in AUM.

6. What are the liquidity provisions for SIFs?

   SIFs can be structured as either open-ended or close-ended funds:

   a) Open-Ended: Investors can enter and exit the fund at any time.

   b) Close-Ended: Units must be listed on exchanges to provide investors with an option to exit.

7. How are SIFs regulated?

   SIFs are regulated under the SEBI (Mutual Funds) Regulations, 1996. SEBI has issued specific circulars detailing the operational framework, eligibility criteria, and disclosure requirements for SIFs.

8. What are the risks associated with investing in SIFs?

   Investing in SIFs involves certain risks:

   a) Strategy Risk: The specialized strategies may not perform as expected.

   b) Liquidity Risk: Depending on the fund structure, there may be limitations on exiting the investment.

   c) Market Risk: Exposure to market volatility can impact returns.

   d) Regulatory Risk: Changes in regulations may affect fund operations.

9. How can Kuber Capital assist me in investing in SIFs?

   At Kuber Capital, we provide end-to-end support for investing in SIFs:

   Advisory Services: Helping you choose the right SIF based on your investment goals and risk appetite.

   Onboarding Assistance: Guiding you through the documentation and compliance process.

   Ongoing Support: Regular updates and performance tracking of your investments.