Mumbai

Gift City has opened the doors for a new class of asset managers with the International Financial Services Centres Authority’s (IFSCA) recent move allowing external fund sponsors to operate under existing third-party fund platforms. Experts said this reduces time-to-market and cost burdens, especially for smaller managers, and is a shift towards globally accepted fund structures.

Fund platforms can now onboard external managers or clients without requiring each one to set up a separate fund management entity (FME), moving towards a ‘plug-and-play’ model which aligns with globally prevalent structures — particularly in jurisdictions such as Singapore.

“The IFSCA’s move to allow third-party fund management services is a game-changer. It enhances product capabilities for both Indian and global asset managers, while opening up new investment avenues for foreign investors, NRIs, and resident Indians alike,” said Abhinav Sharma, Head of International Business at Tata Asset Management.

Lower barriers

By leveraging existing fund platforms, fund managers can bypass the complex and resource-intensive process of establishing substance, allowing them to kick-start their asset management activities quickly, said experts.

“The framework lowers entry barriers, enhances operational efficiency, and aligns with global best practices all the while ensuring investor protection through clear disclosures and governance standards,” Moin Ladha, Partner at Khaitan & Co said. “This also opens the door for emerging fund managers and smaller sponsors to participate in the GIFT IFSC ecosystem, which was previously dominated by larger institutions,” he said.

This reduces cost, speeds up launch timelines, and creates a scalable, multi-manager ecosystem — very similar to what is seen in mature offshore jurisdictions. It allows fund platforms to monetize infrastructure while offering customised strategies under a single regulatory umbrella, Ladha said.

Faster launches

“This framework would not only accelerate their time-to-market but also enable them to concentrate on their core mandate: generating alpha for investors,” said a compliance expert. This would support the rapid deployment and testing of differentiated investment strategies, providing a low-friction pathway to market validation without the upfront commitment of establishing a fund structure, the expert said.

The framework balances flexibility while ensuring strong governance through dedicated officers and sets a clear threshold, requiring funds crossing $50 million in AUM to establish their own FME, said Jaiman Patel, Partner at EY India. 

“This step firmly establishes Gift City as India’s own foreign fund domicile — well-regulated, efficient, and closer to home,” Sharma said. He expects the framework to boost innovation, broaden product choices, and position Gift City as a preferred investment destination across investor segments.

Published on June 30, 2025