Motilal Oswal Gift City Fund: 2 Strategies for NRIs & Foreign Investors
Introduction: Why GIFT City Matters for Global Investors
India has emerged as one of the most compelling long-term equity markets globally. Strong GDP growth, structural reforms, a rising middle class, and founder-led entrepreneurship have created fertile ground for sustained wealth creation. However, for NRIs and foreign investors, accessing India efficiently has often meant dealing with currency risk, tax complexity, and operational friction.
The Motilal Oswal Gift City Fund solves this problem by offering USD-denominated Indian equity exposure through GIFT City, India’s international financial services hub. More importantly, it offers two distinct strategies, allowing investors to choose between direct high-conviction equity investing and a diversified fund-of-funds approach.
This blog explains both strategies in depth so investors can choose what best fits their objectives.
About Motilal Oswal and Its Investment DNA
Motilal Oswal is one of India’s most respected equity-focused financial groups, with decades of experience managing money across market cycles. The firm is known for its “Buy Right, Sit Tight” philosophy—identifying high-quality businesses and holding them through compounding cycles rather than trading frequently.
Across portfolios, the group emphasizes:
- Founder-led companies
- High return on capital employed (ROCE)
- Strong balance sheets
- Long-term earnings visibility
This philosophy is embedded across both Gift City strategies.
Understanding the Motilal Oswal Gift City Platform
The Gift City platform is structured as an IFSC (International Financial Services Centre) AIF, regulated by IFSCA. It allows overseas investors to invest in Indian assets in a globally familiar structure.
Key Structural Features
- USD-denominated investments
- Offshore-style onboarding
- Simplified taxation for non-residents
- No need for repetitive repatriation from India
- Regulated within India but aligned with global standards
Within this platform, Motilal Oswal offers two clearly differentiated strategies.
Strategy One: Motilal Oswal Alternative Investment (IFSC) Trust – Founders Strategy
What Is the Founders Strategy?
This is a direct, high-conviction, long-only Indian equity strategy, often referred to as the Founders Strategy. It invests directly into listed Indian companies that are founder-driven or promoter-led, where management alignment and capital allocation discipline are strong.
The core belief is simple:
Over long periods, founder-led Indian businesses have consistently outperformed, creating exponential shareholder wealth.
Investment Philosophy
The strategy follows a Quality–Growth–Longevity–Price (QGLP) framework:
- Quality: High ROCE/ROE, clean governance
- Growth: Structural earnings growth, not cyclical spikes
- Longevity: Businesses that can compound for 10–20 years
- Price: Reasonable valuation relative to long-term potential
Portfolios are concentrated (25–35 stocks), ensuring each idea has a meaningful impact on returns.
Portfolio Themes
The strategy typically allocates capital to long-term Indian growth themes such as:
- Manufacturing & Make-in-India
- Financialization of savings
- Infrastructure & capital goods
- Healthcare ecosystems
- Technology-enabled platforms
These themes together form the backbone of India’s multi-decade growth story.
Minimum Investment & Fees (Founders Strategy)
| Commitment | Management Fee (p.a.) |
|---|---|
| USD 150,000 – 300,000 | ~2.25% |
| USD 300,000 – 500,000 | ~2.00% |
| USD 500,000 – 1,000,000 | ~1.75% |
| ≥ USD 1,000,000 | ~1.50% |
- No performance / carry fee
- Open-ended structure with exit loads tapering over time
Who Is This Strategy Suitable For?
- NRIs and foreign investors seeking pure, direct India equity exposure
- Investors comfortable with higher volatility in pursuit of higher long-term returns
- Family offices and HNIs with a 5–7+ year horizon
Strategy Two: Motilal Oswal Gift City India Equity Fund of Funds (FoF)
What Is the Fund of Funds Strategy?
The Gift City Fund of Funds (FoF) is designed for investors who want diversified exposure to Indian equities with lower concentration risk.
Instead of investing directly into stocks, this strategy invests into:
- Motilal Oswal’s onshore equity funds (primarily large & midcap)
- Select Indian listed securities (as permitted)
This creates a multi-layered, professionally diversified portfolio while retaining the benefits of the Gift City structure.
Investment Philosophy
The FoF strategy is built on:
- Blending large-cap stability with mid-cap growth
- Smoother return profile compared to concentrated portfolios
- Long-term participation in India’s equity compounding story
It suits investors who want India exposure but prefer a more balanced risk approach.
Underlying Strategy Focus
- Large & Midcap equity funds
- Sector diversification across financials, manufacturing, consumption, technology
- Emphasis on liquidity and scalability
Minimum Investment & Fees (FoF Strategy)
| Commitment | Management Fee (p.a.) |
|---|---|
| USD 150,000 – 300,000 | ~2.25% |
| USD 300,000 – 500,000 | ~2.00% |
| USD 500,000 – 1,000,000 | ~1.75% |
| ≥ USD 1,000,000 | ~1.50% |
- No carried interest
- Same Gift City tax and regulatory benefits
Who Is This Strategy Suitable For?
- NRIs investing in India for the first time
- Investors preferring lower volatility
- Those who want professional diversification rather than stock concentration
- Core India allocation in a global portfolio
Founders Strategy vs Fund of Funds: Clear Comparison
| Aspect | Founders Strategy | Fund of Funds |
|---|---|---|
| Exposure | Direct Indian equities | Indirect via underlying funds |
| Portfolio | Concentrated (25–35 stocks) | Diversified |
| Volatility | Higher | Lower |
| Return Potential | Higher over long term | More stable |
| Investor Type | HNIs, family offices | Conservative NRIs, core allocators |
Tax Efficiency & GIFT City Benefits for NRIs
Both strategies benefit equally from the GIFT City framework:
- No requirement for PAN for non-residents
- Simplified tax compliance
- Competitive capital gains treatment
- Investments made via overseas bank or NRE accounts
- No repeated repatriation hassles
This makes the structure far more efficient than traditional onshore investments.
Key Risks to Understand
- Equity market volatility
- Currency movement vs home currency
- Regulatory changes over time
- Concentration risk (higher in Founders Strategy)
These are long-term investments and should be aligned with overall asset allocation.
Frequently Asked Questions
Is the Motilal Oswal Gift City Fund only for NRIs?
No. It is open to foreign nationals, institutions, family offices, and NRIs/PIOs.
What is the minimum investment?
USD 150,000 for both strategies.
Are returns guaranteed?
No. Returns depend on market performance and investment horizon.
Which strategy is better?
Neither is “better” universally—each suits different risk profiles and objectives.
Can investors switch strategies?
This depends on fund terms and should be discussed with an advisor.
Final Thoughts: Choosing the Right Strategy
The Motilal Oswal Gift City Fund stands out because it doesn’t force investors into a one-size-fits-all approach. Instead, it offers:
- A high-conviction Founders Strategy for growth-oriented investors
- A diversified Fund of Funds strategy for stability-focused investors
Both are backed by Motilal Oswal’s disciplined equity philosophy and delivered through a globally efficient GIFT City structure.
For NRIs and foreign investors looking to participate in India’s long-term growth story, this platform provides clarity, flexibility, and credibility—exactly what global capital demands.
Explore your India investment opportunity.
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