AIFs can leverage without limits in IFSC
December 11, 2020
This will give offshore fund managers a lot of leeway in taking commercial calls
GIFT City regulator IFSCA has removed several restrictions in current regulations on Alternative Investment Funds (AIFs) operating in International Financial Service Centre (IFSC), providing more flexibility to offshore fund managers looking to set up funds in such centres in the country.
Restrictions on leverage, creation of co-investment pools and diversification norms have been done away with by the International Financial Services Centres Authority (IFSCA).
These measures are expected to give offshore fund managers lot of leeway in taking commercial calls and in structuring funds based on negotiations with investors so as to better returns, say experts. Until now, a category I and II AIF operating in IFSC were not allowed to leverage. Also, Category III funds can only leverage up to a permissible limit.