Franklin Templeton Launches First India AIF

Franklin Templeton launched its first alternative investment fund rooted in the volatility-based strategy.

The Franklin India Long Short Equity AIF will invest in stocks and derivatives in Indian companies for medium- to long-term, according to its statement. The minimum investment will be Rs 1 crore.

High net worth participation has been seen in steering growth in AIFs over the last two years, said Nagnath Sundaresan, president and chief investment officer of Franklin Templeton Alternative Investments, in the statement. “The bull market has exhausted; and while the Nifty price-to-equity multiples have seen expansion, corporate earnings have been weak.”

He said momentum has been seen in micro-environment but macro headwinds could pose a problem for the future, eventually leading to higher trading opportunities.

India's benchmark indices have hit new highs but the surge is driven by a select few large caps. Higher oil prices could widen the current account and trade deficits, and stoke inflation. That would raise the possibility of higher rates.

Fund Details

• Equity component will be from around 40 stocks from the BSE 200 universe.
• Offering open to domestic investors and NRI on non-repatriation basis.
• Net exposure will typically be 10-50 percent.
• Operating expense at 0.25 percent a year.
• Exit load at 0.25 percent up to 3 months.