IDFC Asset Management Company (AMC) has launched the IDFC India Equity Hedge – Tactical Fund, an AIF Category III offering, which will follow a Tactical Long/Short Equity strategy.
The fund will have significantly higher net exposures, typically ranging between -40 per cent to +120 per cent, to have higher participation in equity market movements on both sides.
Vishal Kapoor (pictured), CEO, IDFC AMC, says: “With the current market volatility, investors are looking for a fund that can provide absolute returns irrespective of the market cycle or how the interest rates are moving. Also, as the fund’s return and risk drivers are very different from traditional products it has the potential to offer an uncorrelated alternative.”
The fund will be managed by IDFC AMC’s Vijay Krishna Kumar, Director – Liquid Alternatives, an early pioneer in Indian Long/Short investing with a 12-year track record and a total investment experience of 19 years. The investment team will include a Forensic Research Analyst, specialising in deep-dive research into company accounts, valuation modelling and identifying key drivers for long and short alpha and an Algorithmic Quantitative Trader, looking into securities dealing, position monitoring and risk management.
IDFC AMC’s first AIF Category III offering, IDFC India Equity Hedge Conservative Fund, launched in January 2018 follows a Low Net/Market Neutral risk framework in keeping with its conservative character. The new fund, IDFC India Equity Hedge Tactical Fund, will have similar underlying strategies but higher net exposures to better capture equity market movements both on the long and the short side. Being an AIF Category 3 offering, the fund will have a minimum Rs 1 crore investment requirement suitable for Ultra High Net Worth Individuals, Family offices, Corporations and Institutions.
Highlighting the key difference between the two AIF Category III funds he manages, Kumar says: “Our first product, IDFC IEH Conservative Fund offered an alternative to various fixed income strategies while the IDFC IEH Tactical Fund will offer an alternative to Equity oriented strategies. What this allows us to do is to provide an alternative to both fixed income as well as equity oriented strategies, under one fund house. With the two funds under our belt we now offer ‘true to label’ alternatives under our AIF Category III platform to both traditional equity and fixed income funds.”
IDFC says that the objective of these alternative funds is to add diversification and low correlation to existing traditional investments. They are not meant to replace traditional investments, but to add value to the overall asset allocation mix.
