Specialized Investment Funds (SIFs) in India – SEBI’s New Investment Framework (2025)

The AMC must hire a Chief Investment Officer (CIO) with 10+ years of experience managing ₹5,000 crore

The fund manager should have at least 3 years of experience managing ₹500 crore

Again, no regulatory actions in the past 3 years

In simple terms, SEBI is ensuring that only experienced players with strong track records can launch and manage SIFs.

Unlike traditional mutual funds, which allow small-ticket investments, SIFs require a minimum investment of ₹10 lakh per investor. This ensures that only serious investors participate, preventing retail investors from taking on excessive risks.

However, if you are an accredited investor, this limit does not apply to you.

SIFs offer various investment strategies across equity, debt, and hybrid models.

These are designed for investors who want exposure to stocks with some level of hedging:

Equity Long-Short Fund – Combines buying and short-selling stocks

Equity Ex-Top 100 Long-Short Fund – Focuses on stocks outside the top 100

Sector Rotation Long-Short Fund – Allocates funds based on sector performance

✅ 80% minimum allocation to equity and related instruments

✅ Maximum 25% short exposure using derivatives

For those who prefer fixed-income securities, SIFs also offer:

Debt Long-Short Fund

Sectoral Debt Long-Short Fund

✔ 20% in AAA-rated debt

✔ 16% in AA-rated debt

✔ 12% in A-rated & lower-rated debt

✔ 25% max allocation per sector

If you prefer a mix of equity and debt, hybrid models offer diversified exposure.

One of the biggest advantages of SIFs is flexibility in subscriptions and redemptions.

Open-ended, close-ended, or interval-based structures are allowed

Subscription and redemption intervals depend on investment strategy

Notice period for redemption can be up to 15 working days

Close-ended SIFs must be listed on stock exchanges for liquidity

SEBI has ensured that while SIFs offer flexibility, they are not free-for-all high-risk ventures.

Funds are classified into five risk levels (from low to high) and are reviewed monthly.

SIFs can hold up to 25% of net assets in exchange-traded derivatives

Total gross exposure (cash + derivatives) cannot exceed 100% of net assets

Regular portfolio & risk reports must be available on the fund’s website

Scenario analysis & liquidity risk reports must be disclosed

Advertisements must include a standard risk warning

To avoid confusion with regular mutual funds, SEBI has strict branding guidelines for SIFs:

✅ Separate branding from mutual fund schemes

✅ AMCs can use their sponsor’s brand name for up to 5 years but must add “Brought to you by” or “Offered by”

✅ SIF must have its own website

✅ SIF’s logo and brand name must be equal or larger than the mutual fund’s branding

These rules ensure that investors clearly differentiate between SIFs and traditional mutual funds.

If you’re an HNI (High Net-Worth Individual) or an institutional investor, SIFs can be an attractive investment option.

🚀 More flexibility compared to mutual funds

📈 Higher return potential through diverse strategies

🛡️ Better risk management with structured exposure limits

✅ Regulated by SEBI, ensuring investor protection

With the first batch of SIFs expected to launch in 2025, this is an exciting opportunity for sophisticated investors looking for an alternative to traditional investment vehicles.

The introduction of Specialized Investment Funds (SIFs) in India marks a new era for investment strategies. Designed to offer the best of both worlds—flexibility and regulation—SIFs could redefine how high-value investments are managed.

If you're looking for an investment option beyond mutual funds but less restrictive than PMS, SIFs could be the perfect fit for your portfolio.