A practical guide to Alternative Investment Funds in India's first International Financial Services Centre — what they are, how IFSCA regulates them, and how the iRage Stratus Fund operates within this framework.
GIFT City — short for Gujarat International Finance Tec-City — is India's first and only International Financial Services Centre (IFSC). Located in Gandhinagar, Gujarat, it operates as a Special Economic Zone (SEZ) purpose-built to host cross-border financial services activity that has historically been conducted from offshore hubs.
For fund managers and global allocators, GIFT IFSC offers something previously unavailable in India: an onshore-regulated jurisdiction with the structural features of an international financial centre — unified regulation, a competitive tax regime, settlement in foreign currency, and a single-window approvals process for fund and intermediary licences.
The Government of India designated GIFT IFSC as the entry point for activities such as AIFs, banking units, capital markets intermediaries, fund management entities, insurance, and ship-leasing. The International Financial Services Centres Authority (IFSCA), set up under the IFSCA Act 2019, regulates everything that happens within it — replacing the previously fragmented oversight by RBI, SEBI, PFRDA, and IRDAI.
An Alternative Investment Fund (AIF) is a privately pooled investment vehicle that collects funds from sophisticated investors for investment per a defined investment policy. AIFs are categorised into three buckets, each with its own permissible strategies and regulatory treatment.
Funds investing in start-ups, early-stage ventures, social ventures, SMEs, infrastructure, and similar areas the Government considers socially or economically desirable.
Funds that do not fall under Category I or III and do not undertake leverage or borrowing other than to meet day-to-day operational requirements. Typical examples include private equity and debt funds.
Funds that employ diverse or complex trading strategies and may use leverage, including through investment in listed or unlisted derivatives. Hedge funds and quantitative long-short funds typically fall here.
The iRage Stratus Fund is a Category III AIF. Category III strategies may use leverage and derivatives, and are designed for institutional and sophisticated investors who can evaluate and bear the associated risks.
A GIFT City AIF combines onshore Indian regulation with the structural features global allocators have historically sought from offshore fund hubs.
A single regulator for funds, banking, capital markets, and insurance within the IFSC — purpose-built for international financial services.
GIFT IFSC funds can accept subscriptions from non-residents and Indian residents (subject to applicable conditions), bridging domestic and international pools.
The IFSC regime offers competitive tax treatment designed to align with leading international financial centres. Investor-level tax treatment depends on residency and individual circumstances.
Modern office space, integrated trading and clearing infrastructure, co-location services, and a high-density financial services ecosystem.
Single-window clearances for fund registration, intermediary licensing, and operational approvals reduce time-to-launch versus traditional onshore alternatives.
Funds may be denominated and settled in major foreign currencies, enabling natural hedging for international investors.
The IFSCA (Fund Management) Regulations consolidate fund registration, licensing, and conduct requirements for fund management entities operating from GIFT IFSC. Some of the features that matter for institutional allocators:
The above is a high-level overview. Specific terms applicable to a fund are set out in its Private Placement Memorandum (PPM) and registration documents. Tax treatment depends on investor residency and individual circumstances — investors should consult their own legal and tax advisors.
The iRage Stratus Fund is an IFSCA-registered Category III AIF, domiciled and managed from GIFT City. It employs systematic long-short quantitative strategies in Indian markets, using data-driven models and rules-based execution.
Structure
Category III AIF, Open-Ended
Domicile
GIFT City — IFSC
Regulator
IFSCA
Liquidity
Monthly windows; zero exit load; no lock-in
Strategy
Systematic long-short quantitative
Manager
iRage Investment Management LLP
IFSCA-regulated AIFs are designed for sophisticated investors. Eligibility broadly extends to:
Investor eligibility, minimum commitment, and subscription mechanics are governed by the fund's PPM and IFSCA regulations. Each subscription is subject to KYC, AML, and any applicable FATCA/CRS requirements.
Common follow-ups about the IFSC, IFSCA, and how a GIFT City AIF operates. For fund-specific questions about the iRage Stratus Fund, see the FAQ.
Yes. GIFT City is located in Gandhinagar, Gujarat — within Indian territory. It is structured as a Special Economic Zone (SEZ) and operates as India's only International Financial Services Centre (IFSC). Activity inside the IFSC is regulated by IFSCA, an Indian statutory authority created by the IFSCA Act 2019.
Before IFSCA, financial activity in GIFT IFSC was supervised by four separate regulators — RBI, SEBI, PFRDA, and IRDAI — each per their domain. This was operationally complex for cross-domain institutions. The IFSCA Act 2019 consolidated all financial-services regulation within the IFSC under a single authority, giving managers a unified rulebook for funds, banking, capital markets, and insurance.
No. AIFs registered with IFSCA in GIFT City operate under the IFSCA (Fund Management) Regulations, not the SEBI (Alternative Investment Funds) Regulations, 2012. The two are parallel regimes. SEBI Cat III AIFs are onshore-mainland; IFSCA Cat III AIFs are GIFT-IFSC. The fund categorisation (I/II/III) carries over because both regimes use the same taxonomy, but the regulator, structures permitted, and investor base differ.
A Special Economic Zone (SEZ) is a designated zone with its own customs, tax, and regulatory regime to support specific activities. An International Financial Services Centre (IFSC) is a specific type of zone purpose-built for cross-border financial services. GIFT City is both: it sits inside the GIFT SEZ, and the IFSC is a subset of activities within that SEZ.
Yes, subject to IFSCA regulations and the fund's own investment policy. IFSCA-regulated AIFs can hold international as well as Indian assets, with limits, disclosures, and conditions specified in the fund's PPM and applicable IFSCA notifications. India-focused mandates (like the iRage Stratus Fund) concentrate their portfolio in Indian markets by strategy choice.
Speak with our team about how the iRage Stratus Fund fits within a portfolio. We can share the Private Placement Memorandum, walk through subscription mechanics, and answer structural questions.
Investments in Alternative Investment Funds are subject to market and other risks, including the possible loss of the entire principal amount invested. Past performance is not indicative of future results. There is no assurance that the investment objectives of any fund will be achieved. Please read the Private Placement Memorandum carefully before investing. See full disclaimer.