About Company
ICICI Prudential Long Short Fund
Fund Snapshot
| Year of Inception | 2007 |
| Number of Stocks | 25 |
| Investment Horizon | Long Term |
| Fund Managers | Nandik Mallik |
Investment Philosophy
- The strategy is to invest in companies that have been thoroughly studied (via futures).
- Cash Positions can have exposure to Nifty and Bank Nifty stocks.
- The approach is to invest in businesses that have been extensively investigated (via futures).
- By writing index call/put options and collecting premium profits, options exposure seeks to profit from the market’s course.
- The AIF requires a minimum investment of Rs 1 crore.
- 100 percent Upfront Capital Contribution
- Subsequent subscription/exit – Monthly / Quarterly Redemption
- Management Fee – 1.50 percent of NAV per annum (paid daily) for Class B & C, 1 percent of NAV per annum (charged daily) for Class A
- Hurdle Rate – 12% per annum (pre-tax)
- Performance Fee – on a pre-tax basis, 20% per annually (p.a.) for Class A and B and 15% per annum (p.a.) for Class C beyond hurdle, with a high watermark. The ending NAV (after tax) of the year in which Performance Fees were last charged is the high watermark NAV.
- Exit Load – Class B & C: 0.5 percent of NAV for 3 months from the date of each allotment, above 3 months: Nil
- Nil in Class A.
Why Invest In Long-Short Funds?
Long-short funds can help mutual funds and PMS manage their diminishing alpha and client experience challenges.
Long-short funds provide the most investment options to fund managers. Long-short portfolios, like PMS, are not limited to a specific asset allocation or minimum equity ratio. Shorting and leverage are two further degrees of flexibility they enjoy.
If India is a stock picker’s market for investing in well-performing companies, it must also be a stock picker’s market for shorting companies that underperform.
Long-short portfolios provide a better client experience due to the stability of returns. Long short portfolios, comprising of hybrid mutual funds like equity savings or balanced advantage funds, fall between traditional debt and traditional equity on the risk-return continuum.
As a result, they are less prone to performance chasing by advisers and customers and have lower volatility and draw downs than typical stock funds.
Individuals account for 70% of the industry’s AUM in long short funds, and it is discovered that anyone having 1 crore to invest in a – a successful entrepreneur, a Cxo, or a business family’s family office – has made their money priority both capital preservation and growth equally. Rather with the highs and lows of traditional equities, this client group prefers moderate but consistent returns. This is where long-short funds can assist a client with a pressing need.
Unique Feature
The ICICI Prudential Long Short Fund – Series 1 is a mutual fund managed by ICICI Prudential. One goal is to keep cash position in the index and hedge it using futures on a regular basis. It hopes to profit from the market’s movement in this way. Secondly, it seeks to build position through stock/index futures, which will be based on valuation. This seeks to profit from disparities in valuation between sectors. Thirdly, it will make directional calls using index options. It hopes to benefit from even range-bound markets in this way.
- Equity Valuation – Not very cheap
- 10 Year G-Sec Yield – 01%
- 3 Year AA Corporate Bond* – 94%
Long-Short Funds aims to generate absolute returns with low volatility, compared to Nifty 50 Index.
Invest in good companies with good management at fair prices.
Role in Portfolio: Equity Long Short Strategy
Flexibility
Equity Long Short Strategy has flexibility to protect capital and has potential to generate returns due to their ability to short stocks and adjust their exposure to the market.
Leverage
Fund can also add leverage to the portfolio by increasing their gross position by 100%.
Managing Net Exposure
Fund can add value by adjusting the net exposure based on market conditions: Lowering net exposure when market conditions are unfavorable and increasing net exposure when conditions are favorable.
Long Short Strategy: Portfolio Positioning
- Allocation to Long Short Strategy typically comes in equity bucket with objective of risk reduction and enhancing return. It may complement your long only Equity Portfolio and aims to provide risk adjusted returns
- Long Short Strategy is suitable for investor who aims to reduce the volatility from their equity portfolio and aims to earn risk adjusted returns over medium to long term.
Learn about the experienced fund managers responsible for investment decisions, portfolio strategy, and long-term fund performance.
Nandik Mallik
Nandik Mallik joined ICICI Prudential Asset Management Company Limited in January 2017. His past employers were Fair Isaac, Bangalore, NM Rothschild, Mumbai, ICICI Bank, Mumbai, BNP Paribas, London, Credit Suisse, London, and Edelweiss Asset Management, Mumbai. Nandik holds a master’s degree in finance from London Business School, a postgraduate diploma in management from IIM Calcutta, and a bachelor’s degree in engineering from IIT Kharagpur
Find answers to common questions about fund investments, performance, portfolio strategy, and investor services.
The ICICI Prudential Long Short Fund follows an equity long-short strategy that combines long positions in fundamentally strong companies with hedged and tactical short positions through futures and options. The goal is to generate relatively stable, risk-adjusted returns across different market conditions.
This strategy may suit HNIs, entrepreneurs, CXOs, and family offices looking for capital preservation along with moderate long-term growth. It is generally suitable for investors seeking lower volatility compared to traditional equity-only portfolios.
The fund actively manages market exposure using futures, index options, and hedging strategies. By lowering net exposure during uncertain market phases and increasing it during favorable conditions, the strategy aims to reduce drawdowns and improve portfolio stability.
The minimum investment amount for the fund is ₹1 crore, making it primarily designed for accredited and high-net-worth investors seeking alternative investment opportunities beyond traditional mutual funds.
Long-short strategies can help diversify traditional equity exposure by reducing volatility while still participating in market opportunities. These strategies aim to deliver more consistent returns through flexible positioning, leverage, hedging, and the ability to benefit from both rising and falling sectors or stocks.
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Disclaimer: Investing in AIF, PMS, Gift City or Mutual Fund is subject to market risk. Please read the related documents carefully. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. Actual portfolios may differ as a result of account size, client-imposed investment restrictions, the timing of client investments and market, economic, and individual company factors. We at ALTPORT do not guarantee any returns in the hands of investors, nor do we take any sort of accountability for the performance of the scheme.