Explained: How is Specialised Investment Fund different from mutual funds, PMS, and AIF
Tired of too many ads?
Remove Ads
What is a Specialised Investment Fund (SIF)?
Mutual Funds (MFs)
Tired of too many ads?
Remove Ads
Portfolio Management Services (PMS)
Alternative Investment Funds (AIFs)
Structure and Regulation
Tired of too many ads?
Remove Ads
Investment Flexibility and Strategy
Liquidity and Tenure
Who can set up a SIF?
With a wide range of investment options today, it's crucial to understand the key differences between vehicles like Specialised Investment Funds (SIFs), Alternative Investment Funds (AIFs), Portfolio Management Services PMS ), and mutual funds—each tailored to distinct investor needs, risk appetites, and return expectations.The market regulator Sebi has introduced a Specialised Investment Fund (SIF) framework to bridge the gap between mutual funds (MFs) and portfolio management services (PMS), and it aims to provide sophisticated investors with more flexible investment opportunities while ensuring regulatory oversight.Mutual funds pool money from multiple investors to invest in stocks, bonds, or other securities. They are highly regulated, offer diversification, and are accessible to a wide range of investors, making them one of the most popular investment vehicles. MFs are suitable for those looking for lower risk and ease of management.PMS offers customised portfolio management to wealthy investors, with a minimum ticket size of Rs 50 lakh. It provides personalised attention, allowing investors to tailor their portfolio based on risk appetite and goals. While providing more control than mutual funds, PMS often carries higher fees and risks.AIFs are investment funds pooled privately and involve investments in real estate, hedge funds, private equity, etc. They are open to sophisticated investors with a minimum entry limit of Rs 1 crore. AIFs come in three categories—high-risk, moderate-risk, and lower-risk funds—and are less regulated compared to mutual funds.Unlike mutual funds that pool investor money into diversified portfolios, or PMS that provides tailored portfolio management, SIF is a newly introduced investment avenue by the regulator, offering a unique structure and strategy for sophisticated investors.Mutual funds in India are regulated by SEBI and follow strict norms regarding transparency, liquidity, diversification, and suitability for retail investors. PMS offers customised portfolio management to wealthy investors where portfolios are managed on behalf of individual clients with a minimum investment threshold currently Rs 50 lakh.AIFs are pooled investment vehicles for sophisticated investors and are categorised into three types—high-risk, moderate-risk, and lower-risk funds. They are meant for high-net-worth individuals (HNIs) and institutional investors looking to participate in less-regulated, high-risk opportunities.The minimum amount to be invested in an SIF will be Rs 10 lakh per investor. The fund house can offer a SIP and SWP but it must comply with the minimum threshold amount.Mutual funds follow standardised asset allocation models and are limited to listed instruments in most cases. PMS offers more customisation, with fund managers directly managing portfolios tailored to the client's profile. AIFs allow flexibility in investing in unlisted securities, structured debt, and real estate, depending on the category.The regulator allows SIFs to offer 3 categories of investment strategies: they are equity-oriented strategies, debt-oriented strategies, and the third is a hybrid category. The current framework allows only one strategy per category per SIF.Mutual funds provide high liquidity with daily NAVs and redemption options. PMS products are also relatively liquid, though with more constraints compared to mutual funds. AIFs, depending on the strategy, may have multi-year lock-ins and limited exit windows.The SIF can be open-ended, closed-ended, or interval-based. The redemption process may include a notice period of up to 15 working days, allowing fund managers to manage liquidity effectively.There are two routes to establish an SIF. As per the first rule, a fund house must be in operation for a minimum of 3 years with an AAUM of Rs 10,000 crore in the preceding 3 years. The fund house must also have an additional fund manager and must have at least 3 years of experience managing AUM of Rs 500 crore.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
‘New SOPs, higher spending limit set to empower ULBs'
Lucknow: In a significant step to strengthen the financial and administrative autonomy of urban local bodies (ULBs), the urban development department has increased the spending limits. By revising the standard operating procedure after a gap of four years, the department has made provisions to provide additional flexibility and authority to nagar palikas (city councils) and nagar panchayats (town councils). "Increasing their spending limit, the govt has given the authority to nagar panchayats to undertake works up to Rs 1 crore while nagar palikas can take up works up to Rs 2 crore. Their spending limit was capped at Rs 40 lakh so far," an official said. To uphold the integrity of urban development projects, the revised SOP mandates a shared accountability framework. In cases of substandard construction or measurement discrepancies, 50% of the financial recovery will be made from the contractor and the remaining 50% from the engineers and administrative officers concerned. The recovery process will be overseen by the district magistrate and, if required, recovery would be done from the erring contractors and companies by attaching their properties as per the revenue recovery code and laws. The newly introduced SOP also paves way to acclerate the pace of development with the help of latest technology and tools. Sharing an example, a senior officer from the department said that a method that encourages recycling of old debris and bitumen for road construction would be followed. Urban bodies have been instructed to maintain ward-wise road directories, complete documentation, and conduct GIS mapping of infrastructure for long-term monitoring and project execution. Principal secretary, urban development, Amrit Abhijat said that the SOP and reforms notified recently would not only enhance the financial independence of local bodies but also improve the quality, transparency, and effectiveness of urban governance.
Time of India
an hour ago
- Time of India
Toll collecting firm under scanner for evading stamp duty worth Rs 63 cr
Lucknow: A private company engaged in collecting toll on the national highway in eastern UP is under scrutiny for duping the local administration to the tune of crores. The fraudulent activity was detected more than two years after the private entity was awarded the contract for collecting the toll. Tired of too many ads? go ad free now According to officials, a company engaged to collect money from motor vehicle owners for using the national highway stretch in Bhadohi did not pay the required stamp duty to the local administration. Roped in to manage the toll plaza over national highway 19, which connects eastern UP with Bihar and onwards, the company was supposed to pay a sum of about Rs 63 crore to the stamp and registration department as duty. The charges were incurred for taking the land on a 15-year-long lease to collect the toll from road users. The agreement was signed between the stakeholders in March 2023, said officials. However, it was later detected that only Rs 100 was paid as stamp duty to the state coffers. According to the officials, a complaint case has been filed before the local magistrate to initiate action and prosecute the offenders.
Time of India
an hour ago
- Time of India
Lucknow becomes UP's 1st ‘zero fresh waste dump' city
Lucknow: With the launch of its third fresh waste processing plant at Shivri West, Lucknow has become the first city in Uttar Pradesh to achieve 100% processing of daily waste, officially earning the status of a 'zero fresh waste dump' city. The newly inaugurated facility has the capacity to handle 700 metric tons of fresh waste daily. Combined with the city's two existing plants, Lucknow now processes all of its daily waste—amounting to over 2,100 metric tons—without any dumping. The existing daily waste generation of the city is 2,000 metric tons. The plant was inaugurated by urban development minister AK Sharma and mayor Sushma Kharakwal. According to Sharma, the Lucknow Municipal Corporation (LMC) received approximately Rs 100 crore in departmental support and was authorised to partner with private entities through tenders. He noted that nearly two-thirds of the city's 19 lakh metric tons of legacy waste was processed, converting a decades-old dumpsite into usable land. Around 13 lakh metric tons of waste was cleared, freeing up 25 acres, with another 15 acres expected to be cleared in the coming six months. Kharakwal stated that the LMC processes waste into three key outputs: Refuse-Derived Fuel (RDF) for use in cement and fertiliser industries, construction and demolition (C&D) waste for infrastructure reuse, and compost for agricultural purposes. The mayor added that this integrated approach positions Lucknow among a limited number of cities globally that process 100% of their daily waste. Sharma highlighted initiatives such as "UP Darshan Park," where replicas of monuments like the Taj Mahal and Red Fort have been built using recycled waste. A similar concept was also implemented in Prayagraj's Kalawati Park. He also mentioned that delegations from Brazil and Andhra Pradesh recently visited the site, indicating growing interest in the city's waste management model.
