AIF activity picks up steam in IFSC at GIFT City

New Delhi: At least half a dozen entities have applied to set up alternative investment funds (AIFs) in the international financial services centre (IFSC) at Gujarat GIFT City for catering to investors globally, a top official said. This included Multiples Alternate Asset Management, Kedaara Capital and Avendus Group. Tapan Ray, MD and group CEO, GIFT City, said: "True Beacon launched the first AIF in Gujarat International Finance Tec (GIFT) City last month. The AIFs will cater to investors globally and provide a seamless route to participate in the Indian capital markets. We are seeing huge interest from Indian and global institutions to set up funds in IFSC. Moreover, half a dozen applications for AIFs have come."

Most of the applications are for the Category-II and Category-III AIFs. Roy, further, said that GIFT-City, India's only IFSC, is the natural gateway for inbound and outbound investment in the country and has emerged as a preferred destination for setting up fund business. According to him, the entities are getting attracted towards the GIFT City as it provides tax-efficient structure, world-class infrastructure, unparalleled connectivity, and transportation access, and access to multiple markets from IFSC. In addition, IFSC AIFs are permitted to make investments without having to comply with the diversification requirements, they can borrow funds or engage in leveraging activities.

"We are further focusing to create a globally competitive environment to incentivise entities to establish AIFs within the IFSC," Ray said.

An AIF is a privately pooled investment vehicle that collects funds from investors (whether Indian or foreign) for investing it in accordance with a defined investment policy.