Funds

ICD, Dragon Capital Partners (DCP) develop Shari'ah-compliant investment #fund in #Kazakhstan

Dragon Capital Partners (DCP) has mandated the Islamic Corporation for the Development of the Private Sector (ICD) as a strategic advisor for developing a joint investment fund to raise $100 million for Kazakhstani SMEs. The purpose of the fund will be to co-invest with foreign investors in Kazakhstan and unlock growth potential in key sectors of the country. The Silk-Way Growth Fund initiative aims to attract international equity funds to invest in Kazakhstani SMEs. The Fund will invest in high-growth Kazakhstani industrial and manufacturing SMEs that enjoy competitive advantages and strong export potential and capacity. The Fund will help reviving the Silk Road on Kazakhstani territory.

We intend to make use of the interest in Shariah-compliant products: Secura Investment Management MD

Two successful investment funds have facilitated the Secura Investment Management, the first SEBI registered and Shariah compliant venture capital fund, to come out with a third fund – Realty AIF – with a target to raise 200 crore. The first scheme Secura India Real Estate fund Domestic Scheme 1 has completed with a pay back record of 18%, while the second fund is in the investment stage and its tenure will be over next year. Managing Director M.A.Mahaboob said funds will be invested in equity modes, quasi-equity and equity related instruments, investment in a co-investment capacity with development companies and other promoters. The minimum investment under the scheme is 1 crore which is to be paid in instalments in three years with a down payment of 10% of the capital commitment.

Al Meezan launches MSAP-I

Al Meezan Investment Management (Al Meezan) announced the launch of Meezan Strategic Allocation Plan-I (MSAP-I), an allocation plan under the newly launched fund of funds scheme, Meezan Strategic Allocation Fund. According to Al Meezan CEO Mohammad Shoaib, the plan has an initial term of two years and is now open for subscription. He added that the previous plan with two years duration was very well received by the investors as it gained a cumulative return of 26.21% since its inception. He said the new MSAP-I plan was an ideal investment for those who wished an active asset allocation between Shariah-compliant equity and money market schemes. Al Meezan is the largest private sector asset management company in Pakistan with total assets under management of Rs 86.96 billion in 11 funds and has investor base of 47,000 clients.

Emirates NBD and UTI International to launch Islamic #funds in #India

Emirates NBD Asset Management (Emirates NBD) has entered into a partnership agreement with UTI International (UTI) to launch the Emirates Islamic India Equity Fund. The fund will expand Emirates NBD’s global portfolio and offer investors exposure to Shariah compliant Indian equities. Emirates NBD is looking to develop a portfolio of global funds with leading international partners, and its latest collaboration with UTI forms part of this strategy. Leo Puri, managing director of UTI, said the new fund presents an excellent opportunity for GCC investors to realise strong returns on Shariah compliant Indian equities. The rationale for the agreement is driven by Emirates NBD’s strong interest in India as a growth market. According to a recent McKinsey report, India is expected to rank in the top five global economies by 2020 and to reach the top three by 2030.

First Sharia-compliant #fund to focus on #realestate

#India’s first fully Sharia-compliant fund launched its third investment fund, Realty AIF 1 (Alternative Investment Fund). The fund is meant for the real estate sector with IL&FS Trust Company acting as trustee for the fund and Secura Investment Management as promoter. According to managing director Mehaboob, the fund will raise 200 crore and the minimum investment under the scheme is 1 crore. The tenure of the fund is seven years from the final closing. Mehaboob added that an annualised RoI of 15-20% is expected, with a profit share post hurdle of 80:20 with catch-up. Company officials said the investments under the fund will be made in the modes of investment in equity, quasi-equity and equity-related instruments. Other modes include investment in a co-investment capacity with development companies or other promoters of a portfolio company, and investment in special purpose vehicles created by the company.

Windfall for startups? #Saudi Arabia backs new $100 billion tech #fund

Saudi Arabia is joining forces with Japanese telecom firm Softbank (SFTBF) to form a tech investment fund worth as much as $100 billion, making it one of the largest on the planet. Softbank CEO Masayoshi Son said that over the next decade the fund would be the biggest investor in the technology sector. Saudi Arabia's sovereign wealth fund will put up as much as $45 billion of the money, with Softbank throwing in at least $25 billion. Neither partner appears to be deterred by warnings of potential bubbles in the valuations of big startups and established tech companies in the US. Funding for startups has also plunged recently in India. Earlier this year, Saudi Arabia announced an ambitious plan to create a huge sovereign wealth fund that would be worth 7 trillion riyals ($1.9 trillion) by 2030, which would make it by far the biggest in the world.

IDB’s endowment fund to boost NGOs in #India

Muslim NGOs in India will be able to make use of Islamic Development Bank’s Awqaf Properties Investment Fund (APIF) to develop their endowments and generate funds for their various community development projects. According to Zafar Javeed, IDB’s national convener for India, APIF is in the process of identifying viable endowment projects. Javeed commended IDB group for financing about 300 educational and health-related projects across India over the past three decades. He said that the IDB was a big blessing for the Muslim community in India and there were many projects in the pipeline awaiting IDB aid. Referring to ongoing efforts to introduce interest-free banking in India, Javeed said former RBI governor Reghuram Rajan had hinted at introducing the system to achieve inclusive development.

Khazanah Said to Weigh $500 Million Exchangeable #Sukuk Sale

Khazanah Nasional, the Malaysian sovereign fund, is considering selling as much as $500 million of exchangeable sukuk. The state-owned firm is currently choosing banks for the potential offering. Khazanah has been reducing stakes in listed Malaysian companies through Islamic debt offerings that can be converted into shares. The fund last sold $500 million sukuk that can be exchanged into shares of Tenaga Nasional, the country’s biggest power producer, in 2014. It is also the largest shareholder of IHH Healthcare, Asia’s biggest hospital operator. Sales of Islamic bonds in Malaysia surged 60% this year to 45.8 billion ringgit ($11.4 billion), while offerings of global sukuk climbed 19% to $28.1 billion.

KAF launches Islamic property fund in #Malaysia

Australian Islamic investment company Crescent Wealth and KAF Investment Funds have jointly launched the KAF Australian Islamic Property Fund (KAIPF). Crescent Wealth corporate strategy director Omar Khan said the fund would achieve 9-10% annual return to investors, a target driven by the appetite of Malaysian investors for Australian property. The KAIPF is Malaysia’s first fund that provides non-institutional investors direct access to Australian commercial property. The launch of KAIPF brings the total number of funds under KAF to 18, with close to RM2.3 billion worth of assets under management.

#Malaysia’s $30b fund goes long as Islamic plan progresses

Malaysia’s second-largest pension fund plans to buy more bonds to hedge against another interest-rate cut as it moves further toward becoming a full-fledged Islamic entity. CEO of Kumpulan Wang Persaraan, Wan Kamaruzaman Wan Ahmad said the fund is considering lowering its 5% minimum return target because of the uncertainty in global markets. He also added that this low interest-rate environment, low corporate returns, lower dividend yields will prevail for a much longer period. KWAP bought 30-year Malaysian government bonds at a yield of 4.613% on June 29, days after the UK voted to leave the European Union. Wan Kamaruzaman said the fund will likely keep its 2% allocation to UK assets, despite the results of the referendum, because it adds diversification to the portfolio.

New #Islamic# fund a second wind for #shariah #stocks?

It would be interesting to see just how large the actual appetite is for the Employees Provident Fund’s new shariah-compliant fund, EPF-i, which does not have the minimum 2.5% annual return guarantee and is relying only on the EPF’s track record.
The demand factor from the 6.8 million active and contributing EPF members could well determine just how big a mover EPF-i will have on the local market, experts say. According to a recent survey by the EPF, 71% of members surveyed agreed there should be a shariah-compliant option for their retirement savings. And among the 71% who agree, 46.1% say they would choose to switch to a shariah fund if given the choice, 33.2% have yet to decide and the remaining 21.7% would not switch out of the conventional savings.
It is not known how much EPF savings the 46.1% have but at parity, their asset base would be about RM224 billion — double the intended initial fund size of EPF-i, which is slated to be launched in January next year. The other wild card for actual demand are the fence-sitters (see accompanying story).

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New #Islamic# fund a second wind for #shariah #stocks?

ICD ready to expand agricultural project financing in #Azerbaijan

Azerbaijan and Islamic Corporation for the Development of the Private Sector (ICD) will discuss the opportunities of financing the country's agriculture. The topic will be discussed by ICD's general driector Khaled Al-Aboodiin during his visit in Baku on May 31. The agricultural projects will be financed through the new Food and Agribusiness Fund with an authorized capital of $600 million. The fund will mainly focus on the production optimization of the companies working in agriculture and a decrease in their logistics inefficiency.

Global calls for Najib's head to roll: #1MDB triggers massive shake-up in financial world

#Malaysia could find fame for triggering a new, more effective level of regulatory cooperation between the financial centres of the world. This can be the positive result from landing at the centre of the world’s biggest money-laundering investigation. Investigators are working closely to trace the US$7 bn gone missing from the 1MDB fund into a network of off-shore companies before emerging once again in the bank accounts of politically connected Malaysians. Meanwhile, the Government of Malaysia is continuing to act as if nothing has happened. Prime Minister Najib has been impeding investigations at home, but worldwide he is a smaller player. His political connections cannot save him from the independent justice departments of the various financial centres involved.

1MDB Bond Fates Diverge as Abu Dhabi Vow Trumps Najib Support

The fates of 1MDB bonds are diverging this month: those guaranteed by Abu Dhabi’s sovereign wealth fund have rallied, while notes with support from Malaysia’s own government have dropped. 1MDB's 4.4% 2023 notes, backed by the government, slumped 6.4% in May, set for the worst slide in 16 months. The fund’s 5.99% 2022 bonds, backed by Abu Dhabi’s International Petroleum Investment gained 1.9%. The contrast reflects growing investor concern about the Malaysian government backing as Najib grapples with an economy forecast to expand at the slowest pace in seven years amid a collapse in oil prices.

New global Islamic #venturecapitalfund enters business

A venture capital fund based on Islamic finance principles will be initiated by the end of May. It is the result of a joint initiative of the Islamic Development Bank (IDB) and Malaysia’s state-owned investment firm Malaysia Venture Capital Management. According to Treasury secretary Irwan Serigar Abdullah the initial fund size would be $100mn and could be bulked up later. In the first stages, the venture capital fund would be utilised to finance startup companies in Malaysia and the entire Southeast Asia region and could later be extended to finance entrepreneurial initiatives in other Islamic countries.

EPF makes new strides in ESG investing

#Malaysia’s Employees Provident Fund (EPF) announced plans to divest its stakes in tobacco businesses and focus on investing in assets deemed socially and environmentally responsible. CEO Shahril Ridza Ridzuan said EPF plans to dispose of its stake in British American Tobacco (Malaysia), despite not outlining a specific timeframe for the move. The first fully shariah-compliant fund (EPF-i) is planned to launch in January 2017 with an initial fund size of between 80 and 100 bin ringgit. Preparing for the launch of the EPF-i, the fund had increased its exposure to shariah-compliant investments covering multi-asset classes to about 40% of total investments.

EPF: Members welcome syariah scheme

In #Malaysia the Employees Provident Fund (EPF) expects 1.5 mn to 2 mn members to convert their contributions to the syariah-compliant fund in the first year of implementation. CEO Datuk Shahril Ridza Ridzuan said 71% of the members agreed on the need for the Islamic pension scheme called Simpanan Shariah. Simpanan Shariah’s initial fund size will be RM120 bn. EPF is in the process of classifying its assets as syariah-compliant and conventional, with about 40% of its assets now fully syariah-compliant.

#Privatefunding will be "critical" for MidEast projects - survey

The International Monetary Fund (IMF) has calculated that, if oil prices remain low, the fiscal deficits of the Gulf Cooperation Council (GCC) and Algeria will total almost $900 bn between 2016 and 2021. The non-oil sector in the GCC is projected to grow at an average rate of 3.25% per year over the next five years, compared to an average of 7.75% between 2006 and 2015. Thus, regional governments are being forced to review their expenditure plans. A recent PwC survey found that 75% of the more than 130 owners have already been impacted by funding constraints, while 65% forecast they will have less to spend next year.

Zakat to promote equitable redistribution of wealth and foster a sense of solidarity among the Muslims

On the annual distribution of Zakat by the Elders Consultative Forum of Supreme Council for Shariah in #Nigeria Abiola Ajimobi called on the Muslims to address the effective, efficient collection and management of Zakat fund. One of the beneficiaries of the Zakat distribution, Ridwan Olalekan, who spoke on behalf of others, promised to make judicious use of the items.

Hong Kong bank funds said frozen in 1MDB probe by #Singapore and other authorities

Hong Kong bank accounts belonging to several unnamed individuals have been frozen amid global investigations into the finances of the Malaysian state fund 1MDB. Owners are being probed by authorities in countries outside of Malaysia. Authorities in Singapore charged two men following investigations into their dealings with the fund. A Malaysian parliamentary committee had identified at least US$4.2 billion of irregular transactions by the fund.

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