AMC keen to pursue special opportunity funding: 3 companies submit draft to Sebi

Asset management companies have shown enthusiasm for special opportunity funds, with three such companies recently submitting draft float schemes on this topic to market regulator Sebi.

According to data from the Securities and Exchange Board of India (Sebi), three asset management companies (AMCs) – White Oak Capital, Kotak Mahindra and Samco – filed draft special opportunity or special situation funds in March-April. did.

Currently, Aditya Birla Sun Life MF, ICICI Prudential MF and Axis MF are the fund houses offering special situation funds.

Special Opportunity Funds are mutual fund schemes that aim to exploit opportunities created by special market conditions. These situations are unique circumstances, opportunities, or challenges faced by a company, sector, or economy as a whole.

Feroze Azeez, Deputy CEO of Anand Rathi Wealth Ltd. It said it aims to invest in stocks that are mispriced due to companies facing unusual circumstances. Temporary issues in the production environment.

These funds were previously classified as Category I Alternative Investment Funds (AIFs), but mutual funds are now considering this fund to appeal to a wider investor base.

“Most diverse categories are already explored by mutual fund companies, and the ability to introduce new funds within those categories is limited. Thematic investing allows AMC to explore and experiment with new themes and create fresh funds. We will provide space for the introduction of funds,” Azeez said.

Manuj Jain, co-head of product strategy at WhiteOak Capital AMC, said special situations funds' top 10 holdings are typically very different from benchmark indexes and flexi-cap funds.

Special Opportunity Funds are particularly suited to long-term investors. The risk-reward profile makes these funds an attractive option for those who understand and can tolerate potential volatility, he added.