Artha Bharat Abu Dhabi move: two funds shift from GIFT City
Artha Bharat Investment Managers IFSC is relocating two funds from GIFT City to Abu Dhabi Global Market, citing tax uncertainty and compliance burden.
The funds are the master fund of the $112 million Artha Global Multiplier Fund, which invests primarily in the US consumer theme, and the recently launched Artha Bharat Absolute Return Fund, an arbitrage fund investing in Indian securities. The fund manager is setting up a new fund in Abu Dhabi, and investors in the current funds may shift to it.
What Artha Bharat does
Artha Bharat Investment Managers IFSC is a fund management entity in GIFT City managing over $800 million in assets in the financial centre. Its other funds will continue to be managed from GIFT City, providing risk management and technology support for entities in Abu Dhabi Global Market, Mauritius and Singapore.
Newsletter
The corridor, every morning.
Funding rounds and cross-border capital moves, one email, five minutes.
Tax and investor constraints
The fund manager cited concerns about tax deductions, withholding tax, compliance requirements and restrictions on its investor base. Artha Bharat said the minimum ticket size for its funds in GIFT City is $150,000, compared with $55,000 in Abu Dhabi Global Market, which it noted would allow the fund to widen its investor base.
The fund house also said one fund had not attracted any investors in the last 15 months because of distribution constraints. Non-resident investors must share their PAN details, while the fund cannot accept money from resident Indians because, if resident and non-resident investors are mixed, the fund loses its specified fund status and is taxed at the fund level.
Company view
“We do not believe that taxation is smooth here (GIFT City). There is a lot of uncertainty. Our FME was disallowed the tax deduction under Section 80LA, a matter we are pursuing. Leading fund jurisdictions generally tax at the investor level. In India, there are several categories, with differentiated taxation,” said Sachin Sawrikar, Artha Bharat's founder and chief executive officer.
More in Market Move
