Latest news with #ArthaGlobalOpportunitiesFund
Time of India
04-07-2025
- Business
- Time of India
Artha Global invests Rs 700 crore in Hyderabad's Phoenix Triton project
AI Image (TIL creatives) HYDERABAD: Artha Global Opportunities Fund, a Rs 5,000-crore category III alternative investment fund (AIF) operating out of GIFT City, has made its maiden private credit investment in India with Rs 700 crore to fund the completion of the Phoenix Triton project in Hyderabad. The investment in the 2.8 million square feet commercial real estate project located on a 3.15-acre parcel of land in Financial District, is structured as a four-year non-convertible debenture (NCD). With this investment, the fund said it is pioneering a variable return model that is directly linked to the project's sales performance. With a floor and cap interest rate, the returns ease cash flow pressures on the developer while offering attractive upside potential for investors, it explained. You Can Also Check: Hyderabad AQI | Weather in Hyderabad | Bank Holidays in Hyderabad | Public Holidays in Hyderabad "As we debut the first private credit investment from our over Rs 5,000 crore Artha Global Opportunities Fund, we are bringing to the market innovative structures that solve real-world challenges faced by Indian entrepreneurs. This structured funding for the Phoenix Global Spaces project will provide last-mile financing for a Grade A project nearing completion," said Sachin Sawrikar, managing partner, Artha Bharat Investment Managers IFSC LLP.
Mint
04-06-2025
- Business
- Mint
New funds surge in GIFT City, but old money stays offshore
Moneybags from Mauritius, Singapore and Cayman Islands are yet to make the move to Gujarat's GIFT City given burdensome tax and compliance rules without commensurate benefits, industry executives said. While GIFT City has seen a steady rise in new funds, it has struggled to lure funds out of established offshore centres. As of March, India's financial centre had 229 funds, as per IFSCA quarterly bulletin. However, according to an official aware of the matter, a mere 13 of them, including Alchemy India Long Term Fund, Mirae Asset India Midcap Equity Fund and Artha Global Opportunities Fund have actually migrated from foreign jurisdictions. Among the reasons: Mandatory physical presence of employees, stiff compliance rules, and no added advantage for older close-ended funds making the shift. Local staff Every non-retail fund management entity in GIFT IFSC is required to have at least two individuals physically present—specifically, a principal officer and a compliance officer for managing Category I, II, and III alternative investment funds. (Retail funds must have at least three) Also, if the entity manages assets of $1 billion or more, it should appoint a third person. This is not the case in offshore financial centres, said Vinod Joseph, a partner at Economic Laws Practice. Mauritius allows funds to be set up in the form of companies and the directors of such companies are provided by local administrators, Joseph said. 'Such directors may also serve as directors for other companies, meeting regulatory requirements without needing a dedicated local team." Also read | Low-ticket Gift City funds are almost here. But what holds them back? Singapore does require full-time employees for fund management firms, but it is relatively easier to hire such personnel in Singapore and the people need to be employed locally only if assets exceed a certain size, Joseph added. 'In the case of an existing fund, the actual fund management team is often based outside India. Expecting them to relocate to GIFT IFSC solely to meet substance requirements is not easy," he added. Tax 'For certain sets of funds (Cat-I /II AIF), the fund will withhold tax and the same is available as credit in the hands of the investor, as GIFT funds are tax-transparent. This may not be the case for a Cat-III AIF and credit to the investors will be subject to their local laws," said Vivek Mimani, Partner at Khaitan & Co. 'In contrast, jurisdictions like Mauritius do not require investors to register for tax in India, as the fund itself pays tax and further distributions are tax-free," he said. An executive at a fund which recently relocated to GIFT IFSC said that even as the Indian jurisdiction is evolving and trying to align with international jurisdictions, layers of complexity remain. Artha Global Opportunities Fund, a Mauritius-headquartered and Sebi-registered fund investing in distressed assets and special situations in India said in December that it was the first foreign portfolio investor to move its domicile from Mauritius to GIFT City. Read this | Gift City sovereign green bonds face currency hurdle 'Once a fund relocates to GIFT City, it becomes subject to various domestic compliance obligations—GST registration, TDS, income tax filings, and more," said Sachin Sawrikar, managing partner, Artha Bharat Investment Managers IFSC LLP. 'For a fund which neither provides services nor sells products and typically earns passive income, the requirement to file monthly GST returns is particularly misaligned and burdensome," Sawrikar said. Sawrikar added that payments to foreign vendors, which would typically be tax-free elsewhere, attract withholding tax at GIFT City under India's Double Taxation Avoidance Agreement (DTAA) provisions. 'These additional taxes and compliance costs increase operational burden," Sawrikar added. Relocation is not for everyone For close-ended funds with a limited remaining duration—say, a 10-year fund in Mauritius that has already completed five–seven years—relocating to GIFT City often does not make financial sense. That is because the costs and efforts involved may outweigh the benefits, a person aware of the matter said. 'Relocation is also a time-consuming process that requires approvals from investors in the fund, regulators in the home jurisdiction, and the authorities at GIFT. As a result, many fund managers prefer to let existing funds run their course in their current jurisdiction and instead consider setting up new funds in GIFT City," the person said on the condition of anonymity. Also read | GIFT City isn't just for NRIs and foreigner investors—it has something for everyone Usually, one would not rock the boat if it is sailing right; only a few are willing to take that step, said Ketaki Mehta, a partner at Cyril Amarchand Mangaldas. She added that relocation requires setting up in GIFT IFSC, hiring an investment manager in GIFT City, building a team, and winding up elsewhere. What's ahead? Experts said the government has relaxed certain regulations to lure more funds to the GIFT City. 'Initially, all investors in a fund when the fund was relocating to GIFT IFSC were required to obtain a PAN. However, not every investor was comfortable with it, and recognizing that many of these investors had no other taxable income in India and were tax residents in other jurisdictions, the government relaxed the rule," said Ketaki. Now, non-resident investors who invest solely through IFSC funds and do not earn any other income in India are exempt from obtaining a PAN. 'This change, implemented in 2020, was aimed at streamlining processes and making it easier for foreign investors to participate in IFSC without facing redundant compliance obligations," she added. And read | Mauritius keen to set up shop in GIFT City
