Suraj Nanda, the fund manager for equity and hybrid SIF at Tata Mutual Fund, was earlier running a long-short AIF at ICICI Prudential AMC. Rajesh Aynor, the investment lead for SIF at Union Mutual Fund, was the head of equities at Prajana Advisors, which runs two long-short AIFs. Axis Mutual Fund hired Nandik Mallik to spearhead its equity and hybrid SIF division from Avendus Capital Alternate Strategies. Others moved the talent from their existing AIF business under the AMC to their SIF division.
While 11 mutual funds have received approval to launch SIFs, only five have launched their products: SBI Mutual Fund, Edelweiss Mutual Fund, Quant Mutual Fund, ITI Mutual Fund, and Tata Mutual Fund.
SIF assets stood at ₹2,932 crore in November 2025, up 45.8% month-on-month, according to the Association of Mutual Funds in India (Amfi).
There are two ways a mutual fund can apply for an SIF licence. One, it must have been in operation for three years and have assets under management worth 10,000 crore. If not, it has to appoint a chief investment officer (CIO) for SIF who has 10 years of experience and has managed an average assets under management (AUM) of ₹5,000 crore.
“It is very difficult to find an AIF fund manager who has managed ₹5000 crore because the size of a fund in an AIF is much smaller compared to mutual funds. While the real expertise for long-short sits within AIFs, those managers cannot always be permitted to manage SIFs in their truest form, despite their deeper understanding of risk and strategy construction,” Vaibhav Sanghavi, chief executive officer (CEO), ASK Hedge Solutions.
The Securities and Exchange Board of India (Sebi) introduced SIFs to fill the gap between traditional mutual funds and portfolio management services (PMS). Requiring a minimum ticket size of ₹10 lakh, they are positioned below the ₹50 lakh minimum for portfolio management services (PMS) while offering greater flexibility than standard mutual funds.
Unlike typical equity mutual funds, which are long-only, SIFs can employ hedging and short-selling strategies. However, the talent pool for shorting in the country is very limited, mostly concentrated in AIFs and, to a lesser extent, proprietary trading desks, according to experts.
The talent war
“In the SIF space, there’s a unique opportunity to build talent with specialized skills. Traditionally, India has had strong long-only expertise, with professionals focused on holding stocks for extended periods,” said Ravi Kumar Jha, chief executive at LIC Mutual Fund, which is planning to enter the SIF space.
“While we’ve interviewed many candidates, we realized that short-side experience is still rare in the market. This opens up a great chance for us to nurture and develop this capability internally,” Jha added.
An official from another asset management company, on the condition of anonymity, said their SIF plans were still in the pipeline as they hadn’t found the right talent to run funds in the SIF space.
Radha Raman Agarwal, managing director and chief executive at Swyom Advisors Ltd, which runs a long-short AIF strategy, said the employee churn in the AIF space had increased slightly after the introduction of SIFs.
“Mutual funds, with their larger scale, can hire talent from across the industry, while leaner AIFs will need to protect their teams in the short term,” he said, noting that the introduction of SIFs is expected to deepen the long-short talent pool over the long run.
There are 22 AIFs with long-short funds, according to data from PMS Bazaar. Of these, Mint was able to source data for 14 AIFs, which collectively have 25 fund managers or professionals with long-short expertise.
Not that attractive
Meanwhile, experts noted that talent in the AIF space is hesitant to move to mutual funds.
“AIF fund managers are reluctant to move to SIFs in a mutual fund structure because of the difference in compensation, fund management rules and availability of different asset classes,” said Laukik Bagwe, chief investment officer-SIF and head of fixed income at ITI Mutual Fund.
“In AIFs, fund managers earn not just fixed pay but also a share of management fees and performance fees, which can be substantial in good years. SIFs, being part of the mutual fund structure, come with strict Sebi regulations—salary disclosures, skin-in-the-game requirements, tighter trading restrictions, and limited flexibility,” Bagwe added.
The limited availability of long-short talent in India is largely due to an inefficient tax structure for such funds under the AIF framework.
Long-short funds, which fall under category -III AIFs, do not enjoy tax pass-through status and may be liable to pay tax on their derivative income at the maximum marginal rate (MMR), which can be as high as 39%. This higher taxation has historically discouraged the growth of long-short funds in the country, as it reduces potential returns.
As a result, within category- III AIFs, the majority of funds—106—are long-only, while only 32 are long-short, according to PMS Bazaar.
In India, the risk of leverage and expiration constraints within the futures and options (F&O) space makes shorting a speculative hazard rather than an investment tool. As a result, the ecosystem naturally creates fund managers who focus on fundamental value, buying the dip, said Prashant Sadarangani, chief operating officer (COO) at Samarth Wealth Management.