How to invest in GIFT City and AIF by NRIs

GIFT City Alternative Investment Funds (AIFs) provide a seamless route for international investors to access Indian markets. Unlike traditional methods, investors can directly invest in US dollars into a GIFT fund, which subsequently invests in Indian equities and mutual funds. This eliminates the need for opening accounts in India, making the process efficient and accessible.

Atul Singh, MD and CEO of LGT Wealth India, highlights the appeal of GIFT City AIFs for Non-Resident Indians (NRIs), emphasizing their ability to access steady returns through rental yield and infrastructure yield funds, which provide predictable cash flows and sell assets into InvITs or ReITs upon maturity.

LGT’s Unique Offering in GIFT City AIFs
LGT is preparing to launch a GIFT City AIF focused on Indian equity-oriented mutual funds. With an institutional research-driven approach, LGT’s AIF will invest in a diversified basket of 8–10 top-performing mutual funds across fund houses. This strategy ensures sectoral and market cap diversification, offering investors a balanced and robust investment vehicle.

Identifying High-Growth Stocks with Strong Fundamentals
LGT focuses on businesses with consistent earnings and robust balance sheets, characterized by strong moats and growth potential. Sectors such as financial services, electronics manufacturing services (EMS), building materials, and electrical equipment are promising areas for investment, supported by market opportunities in these segments.

Understanding Privately Listed REITs and InvITs
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) offer steady cash flows and diversification opportunities for investors. In India, privately listed InvITs and REITs include assets such as commercial gas pipelines, telecom towers, and warehousing facilities. These investments are backed by high-quality assets and contracts with highly rated companies, ensuring long-term cash flow stability.

Opportunities for NRIs in High-Yield Alternative Funds
Alternative funds targeting rental yields and infrastructure yields present lucrative opportunities for NRIs. These funds generate steady cash flows and transition into InvITs or REITs upon maturity, offering capital appreciation. This dual benefit of income and long-term value growth makes them attractive options for NRI investors.

Mitigating Volatility with Long-Short Strategies
For NRIs seeking to participate in Indian markets with reduced volatility, long-short strategies provide effective solutions. Market-neutral or absolute return strategies limit net equity exposure, shielding portfolios from market fluctuations. Equity-oriented long-short strategies manage beta to minimize drawdowns during market corrections, ensuring quicker recovery during upward trends.

Enabling NRI Access to India’s Startup Ecosystem
LGT facilitates NRI participation in India’s burgeoning startup landscape through private equity and venture capital funds. These long-dated, illiquid funds allow investors to tap into India’s startup growth. However, selecting a fund manager with proven expertise, robust processes, and a strong track record is crucial for success.

In summary, GIFT City AIFs and alternative funds offer NRIs a versatile platform to access Indian markets, ranging from equities and real assets to startup investments. With structured strategies and professional fund management, these vehicles provide stability, diversification, and growth potential tailored to the needs of international investors.