While some experts are surprised with ITI AMC’s decision to jump in as an early entrant into the SIF space while most other mid and small size AMCs have adopted a wait-and-watch approach, JP says their decision to launch an SIF vertical is actually an extension of capabilities they have honed over the last 7-8 years.
CIO Rajesh Bhatia and his team have been managing long short strategies in their AIF vertical for over 7 years and have one of the strongest track records in this category. Skill sets are already in place, track record is proven – applying this in the SIF space is just a logical progression for the ITI team.
JP says long short strategies are in the DNA of ITI AMC’s investment team. Jumping into the SIF space as an early entrant is therefore an extension of what they already do, rather than attempting to do something for the first time, which is what most other AMCs are doing.
ITI’s SIF vertical is branded as “Diviniti SIF” – a combination of the words Divine and Niti – divine refers to wisdom, trust and the Sanskrit word Niti refers to the right way to do things – the well planned way to execute (think of Chanakya niti for example).
SIF is a new product category today but holds very strong potential to grow exponentially over the next few years, primarily due to the investor-centric propositions that this category will offer. ITI AMC wants to position itself early on as an expert in this space with skill sets and track record and thus garner strong market share in this category.
As people build wealth, their focus gradually shifts from pure return focus to risk-adjusted returns because protecting wealth that has been created becomes as important as continuing to create more wealth. That’s where long short strategies come in as optimal solutions.
Distributor sign ups for selling SIFs has been a bit slow – only around 2000 distributors have obtained the license so far. The key issue seems to be the exams – which many see as very tough to pass. JP says the AMFI test 2 decades ago also seemed tough at that time – today it seems like cakewalk.
We as professionals should not shy away from upskilling ourselves at every opportunity. Your clients will warm up to SIFs due to the promise of far smoother journeys than what MFs can deliver within the constraints they have. You have to decide whether you will help your clients embrace SIFs or lose them to competition who will help them.