News & Events

Key Trends in Islamic Hedge Funds (February 2020)

February 2020 | Eurekahedge

The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with. Under a Shariah-compliant framework, transactions which are considered to be unethical under Islamic law are prohibited and instead, fund managers invest in products which are compliant with Islamic guidelines. Islamic financial products are accessible to all investors, some of whom choose to allocate into Islamic funds for purposes of portfolio diversification or their preference in investing in products which deemed as socially responsible. In recent years, Islamic finance has been catching on with traditional finance institutions as international banks have expanded into providing Islamic finance services.

Islamic Hedge Funds Infographic February 2020

February 2020 | Eurekahedge

Eurekahedge’s Islamic hedge funds infographic sums up the industry as at February 2020. Find out more about Islamic hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.

2018 Overview: Key Trends in Islamic Hedge Funds

February 2019 | Eurekahedge

The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with. Under a Shariah-compliant framework, transactions which are considered to be unethical under Islamic law are prohibited and instead, fund managers invest in products which are compliant with Islamic guidelines.

2017 Overview: Key Trends in Islamic Funds

February 2018 | Eurekahedge

The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with.

Australian Islamic Finance Opportunities for 2018

February 2018 | Christopher Aylward, Islamic Finance News

As with a number of other developed economies which are ‘developing nations’ in the world of Islamic finance, Australia is all about opportunities and what could be. The difficulty is determining whether these opportunities will be seized and what will be.

Turkey Would Be the Global Hub for Islamic Banking and Finance

January 2018 | Zubair Mughal, Center of Islamic Banking and Economics

Touching the borders of Asia and Europe, Turkey is a splendid country full of God’s blessings that include its amazing geographical location. Its shoreline is a bridge between Europe, Asia & Africa, considering multiple factors including its important role within the region and its geographical conditions, it’s not wrong to say that the prospects of Turkey to become Islamic banking and finance hub is very high, due to different financial, economic and other regional issues in emerging Islamic finance centers.

2016 Overview: Key Trends in Islamic Funds

February 2017 | Eurekahedge

The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with. Under a Shariah-compliant framework, transactions which are considered to be unethical under Islamic law are prohibited and instead, fund managers invest in products which are compliant with Islamic guidelines. Islamic financial products are accessible to all investors, some of whom choose to allocate into Islamic funds for purposes of portfolio diversification or their preference in investing in products which deemed as socially responsible. In recent years, Islamic finance has been catching on with traditional finance institutions as international banks have expanded into providing Islamic finance services. As the use of derivatives, options and futures are deemed to be speculati

Exploring the Potential of Islamic Contracts to Replicate the Benefits of Conventional Short-Selling

September 2016 | Najla Al Shirawi, Securities & Investment Company

One of the biggest challenges facing Shariah compliant asset managers in today’s wealth management industry is not being allowed to sell short. In this article, Najla Al Shirawi takes a look at some Shariah compliant contracts and the practical implications in using them to replicate a conventional short sale.

Implications of Brexit on Islamic Finance

July 2016 | Siraj Ibrahim, Qatar Development Bank

As the dust settles after last month’s Brexit vote, the smoke is only getting thicker with no clear visibility on the tough road ahead. However, is it really all doom and gloom? Or, seen through a wider context, is it a bitter short-term pill for a better long-term future? In this article, Siraj Ibrahim discusses the implications of Brexit, how this may result in the fulfilment of real Islamic finance, and how Islamic finance will not be significantly affected in the UK.

Turning the Tide as Governments Seek Alternative Fundraising

June 2016 | Danial Idraki, Islamic Finance News

The sovereign Sukuk space has seen strong and sustained momentum by some of the largest issuers as well as a number of debut issuers over the past year. Fitch’s recent data, for instance, showed that Sukuk issuance in key markets reached an eight-year high in the first quarter of 2016, with new issuance in the GCC, Malaysia, Indonesia, Turkey, Singapore and Pakistan up 21% year-on-year to reach US$11.1 billion. Danial Idraki recaps some of the notable sovereign issuances over the last 12 months, and plans by a number of governments for further issuance.

Why Islamic Finance and Offshore Financial Centres go Hand-in-Hand

March 2016 | Hamish Masson, Harneys

In early 2016, popular opinion on the utility and function of offshore centres (OFCs) or, to use the more inflammatory term, tax havens, must be close to an all-time low. The general view, stirred up by cash-strapped governments and the media, is that the vast majority of the world’s wealth is hidden away in secret island jurisdictions, controlled by shady businessmen and inaccessible to the common man. Hamish Masson writes.

2015 Overview: Key Trends in Islamic Funds

February 2016 | Eurekahedge

The Islamic finance industry has traditionally served the needs of the Muslim population which accounts for a quarter of the world’s population. This niche market operates by a different investment philosophy as opposed to a traditional investment philosophy which the rest of the world is more familiar with. The key characteristic that differentiates Islamic funds from other conventional funds is that it provides services to its investors inside a Shariah-compliant framework, prohibiting transactions considered to be unethical under Islamic law, engaging in products that are compliant with Islamic guidelines and promoting greater social justice by sharing risk and reward. In recent years, Islamic finance has been catching on with traditional finance institutions as international banks have expanded into providing Islamic finance services.

Misconceptions about Islamic banking: Some preliminary issues

February 2016 | Chowdhury Shahed Akbar, Islamic Finance News

It is observed that various misconceptions about Islamic banking are disseminated by many who criticise Islamic banking. Islamic banking is becoming an important part of today’s banking industry with increasing market share across the globe. It is therefore essential to know the basis of such misconceptions about this growing industry. In this article, Chowdhury Shahed Akbar attempts to discuss to a greater extent about some issues which are relevant to the origin of the misconceptions.

Singapore: Too little too late?

January 2016 | Vineeta Tan, Islamic Finance News

Singapore’s prowess as a global financial hub is undeniable and while there have been efforts made to position itself in the Islamic financial markets, these have not translated into the success story many have hoped for. Vineeta Tan provides a breakdown of the Lion City’s Islamic finance ecosystem.

Luxembourg: Championing Islamic Finance in the Eurozone

December 2015 | Vineeta Tan, Islamic Finance News

The Grand Duchy of Luxembourg has a long-standing reputation as being one of the foremost financial centres for the international community and building on its solid repertoire, enabling regulations and strong political will, also made a name for itself in the Islamic finance universe. Vineeta Tan provides an overview of the country’s Shariah finance terrain.

Islamic Fixed Income Deserves More Attention

November 2015 | Jamil Mufti, Bank of London and The Middle East

There are often articles written on the Islamic finance sector highlighting the exponential growth in the market, but are we paying enough attention to the range of products being offered to institutional as well as retail users? There seems to be little reference to the product range, which could potentially add value to the real Islamic economy by way of providing efficient methods of managing risk, saving, investing and borrowing. Jamil Mufti writes.

An Overview of the Islamic Fund Management Process

October 2015 | Mohamed Hage, Islamic Finance News

As the Islamic investing industry is flourishing, the focus on re-assessing asset allocation strategies, development and strategic thinking would be critical to achieving the right outcomes. According to Thomson Reuters, global Islamic funds under management are expected to reach US$77 billion by 2019. Mohamed Hage highlights the importance of selecting the right Islamic fund manager and describes a robust selection process in determining which Islamic funds to invest in.

The Role of Islamic Finance in Formalising India’s Financial System

September 2015 | Tushar Garg, Islamic Finance News

Narendra Modi, the prime minister of India, in a public rally in New Delhi on the 4th February 2015 observed: “Pradhan Mantri Jan Dhan Yojana is a reflection of how rich India’s poor are at heart. Without any obligation to put any money in the zero balance accounts, they didn’t open an empty account”. This statement communicates a lot about the healthy and visionary present status of the Indian economy. Tushar Garg writes.

Islamic Securitisation – Still Waiting in the Wings?

August 2015 | Debashis Dey, White & Case

Several years ago, around 2008, the writer was asked by industry commentators whether the classic Sukuk structures common in the market would finally evolve from ‘asset-based’ structures to ‘asset-backed’ structures that were true securitisations and thus limited in recourse solely to the performance of the assets underpinning them. At the time, this writer thought that such progress was inevitable, particularly given that the move to asset-backed would follow more closely the concepts that were promulgated by the scholars when structuring Shariah compliant issues. Flash-forward to 2015, the industry has not moved on very much from the asset-based structures still dominating the market and asset-backed structures are very few and far between. This raises the fundamental question why such asset-backed structures are still very much a minority and also why the industry has not evolved notwithstanding the continued pressure from scholars to do so.

Islamic Finance in Korea: Is The Timing Right for It?

July 2015 | Yong-Jae Chang, Lee & Ko

In Korea, it has been a very frustrating and painful experience for a market participant with a keen interest having to wait for any significant developments to introduce Islamic finance (in particular, Sukuk) transactions because there has been no public debate or discussion of the bill to amend the Special Tax Treatment Control Act (STTCA) since 2011. This is so true especially after witnessing each successful issuance of sovereign Sukuk by the UK and Hong Kong governments in 2014. Yong-Jae Chang writes.

Derivatives and Hedging in Islamic Finance

May 2015 | Nabilah Annuar

Playing a role in the Islamic finance sector under the headings of structured products, treasury products and risk management, derivatives are financial assets that derive their value from the performance of another underlying entity such as an asset, interest rate or index. Common forms of derivatives include forwards, futures, options and swaps and they are widely used as a means of efficient hedging and for quick and easy access to a market. However, despite their widespread use in the conventional industry they remain a divisive topic in Islamic finance. A consensus of opinion among Shariah scholars regarding the validity of derivatives under the tenets of Islamic finance has yet to be reached, despite the growing volume of regulation assigned to this particular product.

Shariah Compliant Asset Management: Overcoming Distribution Challenges

March 2015 | Pierre Oberlé, ALFI (Association of the Luxembourg Fund Industry)

Conventional asset management has seen impressive growth over the last few decades and funds have become a well-established financial product. However, Shariah compliant asset management remains a niche within conventional asset management. Why is Islamic asset management, Pierre Oberlé asks, still small and how can it further develop?

2014 Overview: Key Trends in Islamic Funds

February 2015 | Eurekahedge

Islamic finance plays a key role in the global economy, covering the financial needs of the currently underserved Muslim population. With Muslims forming a quarter of the world’s population, this is potentially a very large market, yet less than 1% of financial assets are Shariah-compliant. Indeed, there appears to be a clear supply imbalance and the Islamic fund industry has been growing steadily over the years to accommodate this demand. While it does not seem likely to have reached a peak, the industry is projected to grow significantly larger driven by a younger generation of Muslims who are more open towards investing in financial assets, and also by wider increases in productivity and prosperity.

Growth of Islamic Finance in Canada

February 2015 | Rehan Huda, Amana Canada Holdings

Though relatively underdeveloped compared to some other Western jurisdictions, namely the UK and the US, Islamic finance is making small but steady strides in the Canadian market. Rehan Huda discusses the correlation between the growth in size and affluence of the Canadian Muslim community and growth in the level of observance, leading to more vocal demand for Islamic financial products and services.

Opportunities for Islamic Finance in Africa

January 2015 | Patrick Colegrave and Joanna Hossack, Harneys

Enormous, diverse, rich in resources but historically underserved and overlooked by the financial services sector, Africa has a Muslim population of over 400 million. A nascent Islamic finance industry is gradually emerging across the continent, invigorated by the strengthening of economic links and increased trade between Africa and the rest of the world. – with the Middle East especially playing an important role in bringing vital investment into rapidly developing countries. Patrick Colegrave and Joanna Hossack look at the current climate for the industry, and how this can continue and increase in the coming years.

The Use of Offshore SPVs in Shariah Compliant Transactions Post-FATCA

November 2014 | Louise Groom, Joanna Hossack and Ian Montgomery

In recent years and in the wake of the global financial crisis, international financial centres (IFCs) such as the British Virgin Islands (BVI) and the Cayman Islands (Cayman) have faced unprecedented political and regulatory pressure from governments and international organizations to open up and become more transparent in their business practices. Louise Groom, Joanna Hossack and Ian Montgomery discuss the implications for their position as domiciles for Shariah compliant SPVs.

Singapore: Opportunities for Islamic Finance

October 2014 | Rebecca Simmonds, Islamic Finance News

Singapore is the only country with a non-Muslim majority in the top 15 countries for Islamic finance according to the Monetary Authority of Singapore (MAS), and is ranked first by the World Bank on its Doing Business Ranking 2014. Rebecca Simmonds assesses the opportunities for the city state’s development of Islamic finance.

Thailand: An Opportunity for Islamic Finance?

July 2014 | Rebecca Simmonds, Islamic Finance News

Despite the introduction of an act relating to Islamic finance in 2002, the industry in Thailand has seen little developmental progress over the years, due to minimal support from the Thai government for a comprehensive legislative and regulatory system for the sector. As the country’s sole Islamic bank, the Islamic Bank of Thailand, recovers from a particularly tumultuous 2013, Rebecca Simmonds explores the current condition of Thailand’s Islamic finance offering.

2014 Key Trends in Islamic Funds

June 2014 | Eurekahedge

Islamic finance plays a key role in the global economy, covering the financial needs of the currently underserved Muslim population. With Muslims forming a quarter of the world’s population, this is potentially a very large market with consensus estimates putting the current size of the global Islamic finance industry somewhere in the region of US$1.6 trillion. This is further subdivided among Islamic banking, sukuk, takaful and Islamic funds - of which Islamic banking and sukuk issuances dominate the sector with 80% and 15% of total Islamic assets respectively.

Brazil and Recent Developments in Islamic Finance Initiatives

June 2014 | Alvaro Taiar Jr and Felipe A Bitar

Brazil already boasts a good level of trade flow with Islamic countries. Trade flow growth over the last 10 years has been above 400%. A good example of this is the export of Halal certified chicken. According to the Brazilian Aviculture Union (Ubabef), Brazil exported 1.48 billion tons of chicken to Middle Eastern countries in 2013. The good results are the consequence of a partnership in which the Brazilian market respects and complies with the requirements of the Islamic market.

Hedge Funds Strategies and Shariah Compliant Short Selling

May 2014 | Irfan A Naheem, Infinity Consultants

Hedge funds are a touchy subject in Islamic finance, with scholars widely disagreeing about the Shariah compliance of various strategies. Irfan A Naheem talks us through the key concepts and controversies.

Russia: A Vast Opportunity for Islamic Finance

April 2014 | Rebecca Simmonds, Islamic Finance News

There have been no legislative changes affecting Islamic finance in Russia over the last six months, with providers of Islamic financial products operating within the country’s existing regulations. However the main financial regulator, the Central Bank of Russia, has made recent enquires with financial institutions in the country currently offering Islamic finance products regarding their facilitation and implementation under the existing legislation.

Islamic Finance: From the Cayman Islands to the Middle East and Beyond

March 2014 | Louise Groom and Joanna Hossack, Harneys

The use of offshore companies in Islamic finance is driven by many of the same factors as in conventional banking, as tax efficiency, bankruptcy-remoteness and privacy are considerations common to most cross-border transactions. Louise Groom and Joanna Hossack write on how the Cayman Islands are in a fortunate position as the preferred jurisdiction for Islamic financing structures originating in the Middle East and the UK.

Islamic Trusts: An Alternative Option for the Wealthy

February 2014 | Aida Othman

An increasing number of Muslim high net worth individuals are exploring legal options and structures that help them achieve strategic objectives and optimal arrangements in asset management, planning and distribution. Aida Othman explores the options.

A New Year for Islamic Debt Capital Markets

January 2014 | Rebecca Simmonds

The Islamic debt capital market covers multiple asset classes including asset-backed financing, capital loans, repos, term financing, Sukuk and syndicated finance. While some areas (such as asset-backed financing and repos) are still small, sectors such as Sukuk and syndicated financing have found a keen and growing audience around the world. Rebecca Simmonds explores the current state of the market.

Brazil: Gateway to the Halal Market?

December 2013 | Rebecca Simmonds

Brazil is a predominantly Catholic country, but has carved a niche for itself in the Halal market. One of the largest suppliers of Halal goods to the GCC and the most promising opportunity for Islamic finance in Latin America, Rebecca Simmonds investigates Brazil’s promising future.

Canada: Will Slow and Steady Win the Race?

November 2013 | Rehan Huda, Amana Canada Holdings

Though relatively underdeveloped compared to some other western jurisdictions, namely the UK and US, Islamic finance is making small but steady strides in the Canadian market. Rehan Huda discusses the increasingly attractive Islamic market in the country.

Structuring Islamic Microfinance Investments Through Luxembourg

October 2013 | Said Qaceme

Islamic microfinance, still a nascent industry, has the potential to help alleviate poverty in an ethical way and empower Muslim and non-Muslim micro-entrepreneurs. Said Qaceme looks at how setting up a microfinance investment vehicle may help realise this potential.

Time to Slash Down Industry Over-reliance on Commodity Murabahah

September 2013 | Jalal Khan Momand, IDB

In an effort to reduce the industry’s reliance on a limited range of Shariah compliant instruments, Jalal Khan Momand discusses the IIFM’s new risk-sharing Interbank Unrestricted Master Investment Wakalah Agreement, which the IDB hopes will meet the deficiency of instruments in the investable Islamic liquidity management market.

What is the Future of Islamic Finance?

August 2013 | Cedomir Nestorovic ESSEC Business School Asia Pacific

The Islamic finance industry has seen exceptional growth over the past decade and many optimistic predictions have been made regarding the enormous potential for future development. But Cedomir Nestorovic explains why in his opinion, Islamic finance will never be able to replace conventional finance.

Potential Drivers For The Saudi Capital Market

July 2013 | Dr Ahmed Al Ajlouni

Despite being one of the biggest economies in the region, Saudi Arabia has yet to fulfill its true potential within the Islamic economy. Dr Ahmed Al Ajlouni explores the opportunities and challenges facing the kingdom in its quest to develop a functional and accessible Islamic capital market.

The Next Frontier: Islamic Funds in Singapore

June 2013 | Yeo Wico and Suhaimi-Zainul Abidin, Allen & Gledhill Singapore

Singapore has already developed an enviable reputation as a global fund management hub. Yeo Wico and Suhaimi Zainul-Abidin discuss the new regulatory and tax approaches being adopted to encourage the growth of Islamic funds in the country

Guernsey: An Island of Opportunity

May 2013 | John Richardson, Offshore

While not the first location that springs to mind when thinking of Islamic finance, Guernsey has developed its legal, tax and regulatory frameworks to a point where many Islamic players are now attracted to the island’s well-developed financial industry. John Richardson discusses the steps Guernsey is taking to encourage this trend.

Shariah Compliant Funds Could Boost Brazilian Development

April 2013 | Alexandre Lopes, Maalouf Ashford & Talbot

The sixth-largest global economy, Brazil represents a very real opportunity for Islamic finance to spread its wings in a hitherto relatively untapped region, while Shariah compliant finance offers Brazil an exciting source of funding to boost development. Alexandre Lopes discusses the opportunities and challenges involved.

Prospects for Islamic Financing in Russia

March 2013 | Vladislav Zabrodin and Anna Leksashova, Capital Legal Services

Muslims comprise around 15% of the Russian population and the country has vast potential for Shariah compliant finance across its multiple and varied territories. Vladislav Zabrodin and Anna Leksashova discuss the increasing level of Islamic activity occurring across its retail, capital and corporate finance markets.

Hong Kong: Islamic Finance Getting There Little by Little

February 2013 | Bryant Edwards, Craig Nethercott and Nomaan Raja, Latham & Watkins

With the platform for an Islamic finance offering in Hong Kong almost complete, what are the prospects for the growth of the Islamic finance sector in Hong Kong? Bryant Edwards, Craig Nethercott and Nomaan Raja ask whether the region has the capacity to foster an Islamic finance sector.

Whether to Prohibit Islamic Windows

January 2013 | Aarij Wasti and Peter Hodgins, Clyde & Co

Aarij Wasti and Peter Hodgins explore the continued debate around regulatory frameworks for Islamic financial institutions, and discuss whether conventional financial institutions should be allowed to operate Islamic branches and windows.

The Awakening of the Dragon

December 2012 | Amirullah Haji Abdullah, NOVA Training and Education Institute

Hong Kong has yet to make its mark on the Islamic finance sector, with limited interest from industry practitioners. However, taking a page out of Malaysia in terms of education and training could provide new impetus to the sector. Amirullah Haji Abdullah discusses.

Why Shariah Finance and Real Estate Are A Perfect Match

December 2012 | Ferzana Haq and Natalie Breen, Norton Rose

Islamic finance continues to grow as a prudent alternative to conventional debt-based structures. Financial assets total more than US$1.3 trillion and instruments are expanding into new countries beyond its traditional markets in the Middle East and Malaysia. At its core, Shariah principles favour the development and sharing of risk in physical assets, which contribute to the economic growth of society. There is therefore a natural match between the Islamic finance model and the acquisition and development of real estate assets. Moreover, Islamic finance is a flexible tool which can be used for a wide range of real estate financings.

Australia - A New Islamic Finance Hub?

November 2012 | Nigel Denison

Islamic finance has a long history. However, it has only developed on a global scale over the last 30 years. In that relatively short space of time the industry has grown rapidly and the global market now exceeds US$1 trillion.

Islamic finance in the UK: Soaring ambition

October 2012 | Jan Dinger, Advent Software

Despite its leading position as a western Islamic finance hub, the UK Islamic finance industry faces growing challenges including the lack of a lender of last resort and the absence of a UK sovereign sukuk. Jan Dinger explores.

Islamic Securitisation Structures: More Needs to Be Done?

September 2012 | Nidhi Bothra, Vinod Kothari Consultants

The basic proponents of Islam, which include socio-economic justice, equitable distribution of wealth and so on, have trickled down to the financial system as well to ensure religiously legitimate financial operations, giving the world a whole new distinctive and fast-growing segment in the international banking and capital markets.

Islamic Finance is A Choice in Europe

August 2012 | Eleanor de Rosmorduc and Jean-Nicolas Durand

Eleanor De Rosmorduc and Jean-Nicholas Durand question why success in the retail market is necessary for Islamic finance to reach a viable scale in Europe. One of the sensible things that emerged from the recent financial crisis is a more realistic approach to estimating the growth rate of Islamic finance. Indeed, the 2012 Global Islamic Finance Report foregoes the temptation to make any global predictions at all.

Sri Lanka: Reaping The Dividends of Peace

July 2012 | Roshan Madawela and Martha Mustafina, Research Intelligence Unit

The Sri Lankan economy is considered as one of the emerging economies in Asia with GDP growth exceeding 8% in 2011 and per capita incomes doubling from US$1,062 in 2004 to over US$2,800 in 2011. The positive economic outlook has created opportunities in varied sectors and has resulted in an influx of foreign direct investment to the country. Sri Lanka’s predominant services sector, which accounted for 59% of the GDP in 2009, was one of the key contributors to the economy as companies recorded strong financial performance in the recent financial year and the negative effects of the global recession subsided.

Islamic Finance: The Role of Offshore Jurisdictions

June 2012 | Carolyn Barton, Appleby

As the Islamic finance industry strives to drive forward and out of the global financial crisis, the roles of offshore jurisdictions continue to grow exponentially. Caroline Barton analyses.

Flexible succession planning for MENA families using Cayman and BVI trusts

May 2012 | Raymond Davern, Dennis Ryan and David Pytches, Conyers Dill & Pearman

Raymond Davern, Dennis Ryan and David Pytches look at the ways in which the various types of trust products in each jurisdiction may be of interest to MENA families as succession planning vehicles.

How Will the European Union Directive on Alternative Investment Fund Managers (AIFMD) Affect Australian Fund Managers?

April 2012 | Fadi Khoury, Norton Rose

The recent economic landscape has seen a significant regulatory overhaul of the financial services sector in Europe. This article highlights the impact of the European Union Directive on Alternative Investment Fund Managers (AIFMD) and how it will affect Australian fund managers seeking to undertake capital raising activities in Europe.

Opportunities for Islamic Finance: A New Zealand Perspective

April 2012 | Mohamed Nalar, Auckland Council

The time is right for New Zealand to structure a more focused economic engagement with the Muslim world. Mohamed Nalar provides an insight into the current landscape.

Islamic Finance in a Non-Muslim Jurisdiction: Singapore as a Case Study

March 2012 | Yeo Wico and Suhaimi Zainul-Abidin, Allen & Glenhill

Yeo Wico and Suhaimi Zainul-Abidin discuss Singapore as a case study offering the potential for Islamic finance to flourish in a predominantly non-Muslim country.

Basel III and Islamic Finance: What Lies Ahead?

February 2012 | Mike Kennedy, Bank of London and The Middle East

Basel III is unlikely to materially change the existing challenges faced by Islamic banks. However it is expected to dominate the agenda of many conventional financial institutions. Mike Kennedy discusses.

Reducing Poverty: The Prospects of Islamic Finance in Africa

January 2012 | Basheer Oshodi

Basheer Oshodi believes that the Islamic finance global growth of over 15% per annum may not make much impact in Africa if the continent is unable to solve its poverty challenges. There has been much talk of the poor performance of Africa’s development and governance indicators when compared to other regions. Attention has also been focused on Africa’s poor performance in meeting the Millennium Development Goals and the inability of the region to meet its 2015 targets. Others have stressed the national economic empowerment and development strategy: designed to implement economic and institutional reforms, poverty alleviation, wealth creation, employment generation and value reorientation.

Islamic Microfinance: Solution to Poverty Alleviation?

December 2011 | Moinuddin Malim, Mashreq Al-Islami Finance Company

Microfinance could be one of the ideal approaches to alleviate poverty in the Islamic world. Moinuddin Malim questions why there have as yet been no significant attempts or successful implementations in the sector.

The Future of Participation Banks and New Banking Licenses in Turkey

November 2011 | Ali Ceylan and Burak Gencoglu, Baspinar & Partners Law Firm

The market share of participation banks in Turkey has increased since the 2001 crisis. Ali Ceylan and Burak Gencoglu delve into the banking laws in the country and discuss how it may affect the Islamic finance industry.

Choosing an Islamic Investment Jurisdiction: Bermuda as a Primary Case Study

October 2011 | Cheryl Packwood, Business Bermuda and Belaid A Jheengoor, PwC Bermuda

Bermuda’s tax neutrality and favourable yet robust regulations make it an ideal location for Islamic finance investment. Cheryl Packwood and Belaid A Jheengoor explore the advantages of the jurisdiction.

2011 Key Trends in Islamic Funds

September 2011 | Eurekahedge

Over the last 10 years Shariah compliant funds have seen significant growth, both in terms of the number of funds as well as assets under management (AuM). Rapid developments in the Islamic finance industry, have led to an increasing number of Shariah compliant funds employing different strategies and investing across new asset classes, representing the progress and advances made in the Islamic finance sector. In this report we discuss the key trends observed in the Islamic funds industry since 2000.

Growth of Shariah Compliant Funds in Luxembourg

September 2011 | Pierre Oberlé, Association of the Luxembourg Fund Industry

Pierre Oberlé looks at the special benefits Luxembourg offers to Shariah compliant fund promoters, and reviews the latest developments in this area. Luxembourg’s strengths in conventional investment funds make Shariah compliant investment funds a natural next step. Over the past 20 years, the Grand Duchy has become the leading centre for global fund distribution and Europe’s number one fund domicile in terms of assets. It now also ranks in the top five domiciles for Islamic funds.

Thailand: Regulatory requirements for Sukuk issuances and tax incentives

July 2011 | Siripen Kaodara and Stephen Jaggs, Allen & Overy

Siripen Kaodara and Stephen Jaggs discuss the Thai laws that have brought advancement in the country’s Islamic finance industry. Thailand has a Muslim population of approximately nine million and an Islamic banking system which dates back to 1998. However, it previously lacked the necessary legal infrastructure for high profile Islamic products such as sukuk. Today, Thailand has advanced a few further steps into the growing Islamic finance market by developing its laws.

Jordan: Finally Regulating Sukuk Issuance

June 2011 | Khaled Saqqaf, Al Tamimi & Company

The introduction of the first draft of the Sukuk Islamic Financing Law of 2011 marks a welcome change in the Jordanian financing industry, particularly for Shariah compliant companies and entities. Khaled Saqqaf explains.

Translating Islamic Finance into Japanese Legal Concepts

June 2011 | Takashi Tsukioka, Nagashima Ohno & Tsunematsu

Recently in Japan, Islamic finance has been attracting the attention of many potential market players. In December 2010, the Financial Services Agency of Japan officially announced its aim to ’promote the development of an environment for the issuance of Islamic bonds in Japan’ in its action plan for a new growth strategy.

Islamic Liquidity and Secondary Markets

May 2011 | Eldred Buck, Eiger Trading Advisors

Liquidity is defined as the ability of a bank to fund increases in its assets and to meet its obligations as they come due, without incurring unacceptable losses. The raison d’être of a bank in an economy is in the role of maturity transformation of its short term deposits; which appear on the right hand side of its balance sheet, into long term loans; which appear on the left hand side of the balance sheet and to make a return for shareholders.

Islamic Private Equity and Venture Capital

April 2011 | Ahmad Lutfi Abdull Mutalip, Azmi & Associates

In Islam, money is not a commodity and cannot be traded for profits. It is just a medium of exchange and it stores value. Money, therefore, must be invested in projects and ventures for the generation of activities, for the benefit of mankind and in the process, for profit.

Islamic Finance: Opportunities for Growth and Innovation

March 2011 | Furqan Ahmad, ADCB Meethaq-Islamic Banking (Abu Dhabi)

The recent global financial crisis has shown us the critical importance of having equity participation, risk sharing and fair dealings in all banking and financial services. Internationally, trillions of dollars in wealth was wiped out in the crisis.

The Next Generation of Islamic Asset/Cash Management

February 2011 | Michael Damian Billy, Econophy Capital Advisors

Who will provide the dynamics for an 'idea system' that creates and innovates the processes in 2011 and beyond? While there have been formal discussions held within the Islamic Finance community over the past year regarding product development, acceptable investment practices and execution applications, several key issues remain to be primary topics for exploration. The most critical is, who will take on the leadership role and for what purpose?

Recent Developments of Islamic Finance in Japan

January 2011 | Naoyuki Kabata, Anderson Mori & Tomotsune

For a number of years, the utilisation of Islamic financing methods and practices has been discussed as one of the next significant trends in the Japanese financial market. This has yet to be the case unfortunately, largely because of the prolonged downturn in Japan's economy following the global financial crisis.

Islamic Finance: Post 2009 to 2010 and Beyond – A Sustainable Alternative

December 2010 | Dhafer Salih Alqahtani, Rusmal Partners

After three decades of uneven and sporadic growth, the strength and health of the Islamic financial institutions (IFI) as an industry is well articulated by the fact that the industry is 430 IFI strong in 75 countries out of 195, with total assets exceeding US$1 trillion.

Islamic Finance in the US – Innovation, Compatibility and Challenges

November 2010 | Umar F Moghul, Murtha Cullina

As the Shariah addresses human activity generally, so does Islamic finance – in principle particularly – go beyond mere technicalities and legalities, urging a concern for all of creation as service to the divine Islamic tenets, for example, promote honesty, transparency and fairness, express concern for the well-being of employees, partners and counterparties, and place certain limits on monopoly and wealth concentration.

2010 Overview: Key Trends in Islamic Funds

October 2010 | Eurekahedge

The rapid development of the Islamic fund industry over the last decade represents the progress and advances made in the Islamic finance sector. The primary goal of Islamic funds is to engage in 'ethical investing' into products and companies that are acceptable to the Islamic faith. As such, Islamic funds are wealth management vehicles that cater to investors who want exposure to capital markets inside a Shariah framework, which is the key distinguishing factor from other conventional funds.

Surpassing the Crisis

October 2010 | Camille Klass, Islamic Finance Asia

Keeping to Shariah tenets is an obligation for Islamic financial institutions (IFIs) and it has certainly been a blessing in the wake of the recent financial crisis. Many of the world's banks were brought to their knees on account of indiscriminate lending, excessive speculation and risk, all of which the Shariah prohibits.

Sukuk: A Secured Investment?

September 2010 | Debashis Dey and Gregory Man, Clifford Chance

Since the onset of the recent global financial recession, headlines relating to sukuk defaults by Kuwaiti firm The Investment Dar Company, the financial difficulties surrounding Saudi conglomerates the Saad and Algosaibi Groups, and previous uncertainty around the repayment of sukuk by Dubai property developer Nakheel have led to uncertainty among investors and analysts alike. Especially in relation to the nature of a sukuk investment and, in particular, whether it is a secured investment, therefore raising questions as to what the ultimate recourse of investors would be in a default scenario.

Risk Sharing and Islamic Finance

August 2010 | Abbas Mirakhor and Noureddine Krichene, New Horizon

The foundational principle of Islamic finance is the prohibition of interest (riba) and interest-based contracts. This prohibition has been stated in many verses in Quran and was explicated in many sayings of the Prophet PBUH.

The Role of Venture Capital Model in an Islamic Economic System

July 2010 | Kashif Nisar, Islamic Finance News

Since their inception, Islamic banks have been criticised for not using participatory (profit and loss sharing) modes of financing such as musharakah and mudharabah. Generally, scholars argue that participatory financing is the key to achieve the main goal of equitable distribution of wealth in society. There has been little progress in this area and Islamic banks still heavily rely on less risky financing modes such as murabahah and Ijarah.

Risky Business

June 2010 | Camille Klass, Islamic Finance Asia

Discussions brewing among Islamic bankers about the direction Islamic finance should take could have implications in several areas, not least the risks their banks will face and the risk management measures they have in place.

Liquidity and the Secondary Market

May 2010 | Muhammad Faisal Siddiqui, BankIslami Pakistan

Islamic finance is prohibited by its very mandate to invest in certain businesses and not using various conventional modes of financing. As a result, excess liquidity has always been a challenge for it.

Offshore Appeal

April 2010 | Nazneen Halim, Islamic Finance Asia

In Abu Dhabi and generally across the GCC, a company is not allowed to take in debt in excess of its share capital and if an entity is issuing a multi-billion dollar sukuk, it is inevitable that its debt raising will exceed its share capital. According to a GCC-based banker, the way to structure around the excess – conventionally and in Islamic finance – is to set up an offshore vehicle.

Ireland's New Finance Bill Enhances its Attractiveness for Islamic Funds

March 2010 | PricewaterhouseCoopers (Ireland)

Ireland has made some important improvements to facilitate Islamic finance transactions in Ireland. Under the Finance Bill 2010, which applies from 1 January 2010, the Irish Ministry of Finance has introduced significant amendments to facilitate Islamic finance transactions in Ireland, especially the origination and issuance of sukuk.

The Untested Waters of Default in Islamic Finance

February 2010 | Fawaz Elmalki & Dennis Ryan, Conyers Dill & Pearman (Dubai)

The Cayman Islands has developed a reputation as a jurisdiction of choice for Islamic finance structures, including sukuk. However, the rights held by the investors in the event of default under such structures are largely untested. Shariah principles must be applied when structuring Shariah-compliant financial products, including sukuk. These principles include the avoidance of riba, gharar (uncertainty or speculation in contracts), unjust enrichment and prohibited activities or investments (such as gambling- and alcohol-related investments).

2009 Overview: Key Trends in Islamic Funds

January 2010 | Eurekahedge

The growth of Shariah-compliant funds over the last decade is one of the many manifestations of the dynamic development in the Islamic finance sector. The rapid expansion in the number of managers offering Shariah-compliant investment vehicles across the world demonstrates the increasing diversity of the industry in terms of asset classes and geographies. Currently, Islamic funds across the world are estimated to manage assets of about US$70 billion while the number of funds is about 680.

The Trade-Off

January 2010 | Nazneen Halim, Islamic Finance Asia

Islamic finance is undergoing some sort of schizophrenia. Perhaps this is characteristic of every nascent market, but the underlying issue is not the structures and big numbers in all its technical glory but rather, a simple question of whether or not market players are ready to bear the risk that comes with the rewards.

Islamic Foreign Exchange Swap as a Hedging Mechanism Perspective

December 2009 | Asyraf Wajdi Dusuki, International Shariah Research Academy for Islamic Finance

Islamic foreign exchange swap (Islamic FX swap) is a contract that is designed as a hedging mechanism to minimise market participants’ exposure to volatile and fluctuating market currency exchange rates. To date, there are three main instruments of Islamic swaps – FX swap, cross-currency swap and profit rate swap. This article focuses solely on Islamic FX swap.

Still in the Closet

November 2009 | Nazneen Halim, Islamic Finance Asia

Private equity – be it Islamic or otherwise – is not dissimilar to the perfect marriage. Both parties enter into an agreement for better or for worse and stick through it. More popularly known as venture capital in the western world, private equity is slated to be the new frontier for Islamic finance.

Islamic Capital Markets Responds to the Financial Crisis

October 2009 | Farmida Bi, Norton Rose

The 12 months following the collapse of Lehman Brothers have proved to be extremely challenging for the Islamic capital markets with very little activity to match the rapid rates of growth from 2004 to 2007. Islamic bond issuance increased by 49% in 2005, 153% in 2006 and 79% in 2007. This growth in sukuk issuances was attributable to enhanced liquidity for investors, higher oil prices and a growing sentiment in favour of Islamic financing.

Alternative Construction

September 2009 | Dr Humayon Dar, BMB Islamic

Devout Islamic investors have by and large kept themselves at bay from hedge funds. Consequently, most managers of full-fledged Islamic banks shy away from investing their proprietary money in hedge funds and get additionally nervous on the prospects of having to sell an Islamic hedge fund.

Islamic Finance and SRI: Any Crossover?

September 2009 | Novethic

Socially responsible investing (SRI) is an investment management approach which integrates environmental, social and governance (ESG) criteria in traditional financial analysis. Despite having less framework and detailed rules than Islamic finance, SRI shares a focus on non-economic factors in its economic and social principles.

Islamic Asset Management: Myth or Reality?

August 2009 | John A Sandwick, NewHorizon

In the early days of the Islamic banking sector back in the 1980s, there was one big debate about whether zero-coupon corporate and government bonds were Shariah-compliant or not. The practitioners were understandably naive then, as no one at that time had addressed some of the core issues surrounding the precise definition of Islamic banking.

Islamic Funds Go Green

July 2009 | Jennifer Jacobs, Islamic Finance news

Islamic finance companies looking to reduce their dependence on the real estate sector – which loaded their books with what turned out to be deadweight in the wake of the global financial meltdown – may be moving towards financing projects that have a positive impact on the community or environment.

Credit Crunch: A Chance to Develop the Islamic Finance Market in Germany?

May 2009 | Nicole Guski, Norton Rose

Nearly five years have passed since the federal state of Saxony-Anhalt in Germany issued Europe’s first Islamic bond in July 2004. This prompted market players to be quite enthusiastic about the potential of Islamic finance in the German market. Although more than three million Muslims live in Germany and corporate Germany has a good reputation in many Muslim countries, the expected boom for Islamic finance does not seem to have emerged.

Singapore's Take on Islamic Finance

April 2009 | Islamic Finance news

Singapore’s plunge into the Islamic finance scene did not come as a surprise to many in the industry. Seeing the Islamic finance industry take-off in Malaysia and with Hong Kong and Indonesia playing catch up, Singapore’s obvious move was to take on this ethical form of financing with formidable force. Despite being the first Asian country to fall into a recession, which prompted the government to declare the situation as the worst ever for it, the Lion City was still optimistic about launching its first Sukuk at a signing ceremony last month.

An Alternative Approach to Islamic Finance

March 2009 | Imran Iqbal Janjua

At the second Islamic Finance and Trade Conference held on the 28th and 29th October 2008 in London, strong calls were made for radically reshaping the world’s financial architecture, both by Muslims and non-Muslims. Anne Pettifor, executive director of Advocacy International, a consulting firm that works with low income country governments and organisations to promote positive development, investment and environmental sustainability, demanded that conventional bankers follow Islamic financial ethics and prohibit interest. Five years ago, Pettifor argued that “the next seismic debt crisis would be in America, not Argentina.”

Islamic Finance is Building up in UK amid Downturn

February 2009 | Islamic Finance news

While some Islamic financial institutions in the Middle East are under pressure due to the credit crunch, those in the UK are growing, recording an increasing number of customers as non-Muslims begin to view Islamic finance as a viable alternative. “Business is very much unity and is building up. The corporate, wholesale and retail markets are optimistic about the future of Islamic finance in the UK. European Islamic Investment Bank is moving into private equity while European Finance House has been receiving strong support and been active in the real estate market. BLME (Bank of London and Middle East) has been successful in building assets and developing corporates and asset-based businesses,” said Gatehouse Bank chairman Richard Thomas.

Islamic Private Equity Funds

January 2009 | Paul Wouters

When people talk about private equity, they are referring to shareholdings in companies that are not listed on a public stock exchange. Non-listed companies are not subject to the same level of government regulation and disclosure rules as listed ones. Since there also is no “daily market” where the stock is regularly traded, private equity is less liquid than publicly traded equity. And anyhow, those smaller companies have far less outstanding stocks to be traded or negotiated, leaving little room for sufficient volatility. Moreover, the transfer of private equity in such companies is mostly regulated by law, the articles of association or even stipulated in shareholders’ agreements.

The Role of Islamic Investment Funds in Promoting Cross-border Islamic Investments

January 2009 | Mervyn K Lewis and Nurul Aini Muhamed, University of South Australia

An increase in cross-border transactions is one important manifestation of globalisation. In financial services, as in other fields, globalisation can be seen as a process that opens up national economies and markets, enabling knowledge, technology, ideas, services and capital to move more easily and quickly from country to country, and widening the extent and form of cross-border activities. In this respect, a distinction can be made between globalisation and internationalisation. Globalisation may be viewed as the catalyst for change, to which firms and institutions respond by becoming more international in their operations.

Being Ethical is a Tough Business

December 2008 | Bindesh Shah, Amiri Capital

The Islamic finance market is very young but expanding rapidly. One of the drivers of that expansion is the huge amount of liquidity in the Gulf region. Another is the strong economic growth in countries like Malaysia and Indonesia. This is creating a large pool of investable assets, some of which are already Islamic. Within both regions, though, there is a move toward doing more and more investing in Islamic structures.

Islamic Shorting: Trend or Hype?

November 2008 | Michael Mahlknecht, Delta Hedge

While short-selling is not permitted by the Shariah, more and more Islamic institutions and hedge funds claim to offer Shariah-compliant shorting solutions. Islamic short-selling is often being presented as if it were a major innovation or a significant breakthrough for Islamic finance. In reality, however, basically every contract can be ‘Islamised’ using concepts from modern financial engineering. The question is rather how high the transaction costs are, and, especially, whether one regards such mechanics as Shariah-compliant, or as just an undesirable ploy, which strikes at the foundations of the objectives of Islamic finance.

Malaysia Vies to Maintain Leadership in Islamic Finance

November 2008 | Jennifer Chang and Charlini Yogeswaran Thambaiya, PricewaterhouseCoopers (Malaysia)

The days when Malaysia was striving to establish Islamic finance’s value proposition and to carve out a niche for itself are long gone. The country has emerged as a leader of what today is a viable segment of an increasing number of capital markets around the world. Expanding from its early accomplishment, in 2002, of issuing the first global sovereign sukuk bond1 and, in 2007, the largest-ever corporate sukuk, worth US$4.8 billion, Malaysia continues to be one of the main countries issuing sukuks. It currently accounts for almost two-thirds of the US$80 billion world sukuk market.

Far Eastern Promise: Can Hong Kong Become an Islamic Finance Hub?

November 2008 | Christopher F Richardson, Vinson & Elkins LLP

Hong Kong has long been considered one of the major financial hubs of Asia and indeed the world. Yet Hong Kong has never been considered an active player in the rapidly growing field of Islamic finance. This may soon change, however, if the financial authorities in Hong Kong are successful in implementing their plans to transform the city into a significant global centre for Shariah-compliant investments.

Scope of Islamic Investments in India

October 2008 | Taher Badshah, Kotak Mahindra Offshore Funds

While the roots of Islamic finance lie in ancient Islamic principles, the development of Islamic finance as an industry is relatively new. Developing at a remarkable pace of about 10-15% a year, this industry now represents a vast global practice which has developed a worldwide presence. This can be attributed to the fact that many predominantly Islamic nations have seen an increase in financial wealth mainly due to a surge in exports and increasing oil prices. This increasing income is fuelling an increase in demand for new Islamic financial instruments along ethically-aware Shariah principles as an alternative to conventional commercial banking and investment products.

Venture Capital's Islamic Principles

September 2008 | Dr Oussama Tabbara, Gulf Venture Capital Association

Shariah is Islam’s legal system. It differs from the legal traditions of the Western world in that Shariah represents a comprehensive system for all aspects of life. Its principles strike a balance between the interests of the individual and society. Universally, in any society, investment is the foundation of economic activity.

Shariah Screening and Islamic Equity Indices

August 2008 | Kamal M A Mian, Saudi Hollandi Bank

Islam as a religion guides all aspects of the lives of its followers. Hence, Muslims are required to conduct their economic affairs in accordance with the teachings of Islam. The concept of screening companies before making investments in them is derived from the Shariah principle that Muslims should not partake in an activity that does not comply with the teachings of Islam.

2008 Overview: Key Trends in Islamic Funds

June 2008 | Eurekahedge

Over the last decade Shariah-compliant funds have emerged as one of the most eloquent expressions of Islamic Finance, exemplifying its evolution into a dynamic and diverse industry. Understanding the issues faced in developing, managing and investing into these financial products constitutes an integral component of Islamic wealth management.

Asia-Pacific Issuance Outlook

June 2008 | Moody’s Investors Service

Islamic finance makes up a small part of the world finance industry, estimated to be worth US$700 billion globally. However, it has grown by around 15% in each of the past three years, partly as a result of the increased wealth in Islamic countries driven by high oil prices. This rapid growth shows no signs of slowing.

Derivatives in Islamic Finance

May 2008 | Andreas A Jobst, International Monetary Fund

Despite their importance in financial sector development, derivatives are few and far between in countries where the compatibility of capital market transactions with Islamic law requires the development of Shariah-compliant structures. Islamic finance is governed by the Shariah, which bans speculation, but stipulates that income must be derived as profits from shared business risk rather than interest or guaranteed return.

Overcoming Barriers to Liquidity

April 2008 | Jamal Abbas Zaidi, CEO Islamic International Rating Agency

It is well known that the debt markets consist of government and agency bonds, corporate bonds, municipal bonds, asset-backed securities and Islamic financial instruments. Participants in secondary debt markets include institutional investors, governments, traders and individuals; while the dominant players in the issuer’s market are sovereign and sub-sovereign bodies, the secondary market is usually dominated by banks and financial institutions.

Key Trends in the Takaful Landscape

March 2008 | Bernardo Vizcaíno, Eurekahedge

The Eurekahedge Islamic fund database has grown from its launch in 2006 to now encompassing information on more than 550 Shariah-compliant funds, keeping up with an industry that saw 131 new launches in 2007 alone. Despite this healthy growth, takaful-dedicated funds are few and far in between (with notable examples in Malaysia, Singapore and Bahrain). However, this doesn’t properly reflect the emergence of takaful and its importance in the overall Islamic funds industry.

Private Equity – Modern-Day Musharakah?

March 2008 | Omar Shaikh, Ernst & Young

Islamic finance has been widely acclaimed as the fastest-growing sector within the financial arena. Industry reports indicate the size of global Islamic assets to be over US$500 billion, with growth rates of 15% to 20%. Much of this growth and development has been within the debt and related capital markets sectors such as sukuk and commodity murabahah.

Islamic Funds and the Asset Allocation Gap

February 2008 | Dr Ken Baldwin, Venture Capital Bank

The demand for Shariah-compliant funds is growing. But does the dominance of equity funds over other types of funds indicate a growing asset allocation gap? The objective of asset management is risk-constrained return maximisation. Since asset returns are ordinarily less than perfectly correlated, the risk to the returns of a group of assets taken together is less than the sum of the risks of individual assets taken in isolation. This is good news for investors with well-diversified portfolios and a major incentive to invest in funds.

The Superb Performance of Islamic Equities

January 2008 | Research Team, Global Investment House

Over the last few years, financial institutions offering Islamic products have taken a number of important steps to keep pace with developments in the global private equity and venture capital industry. As private equity and venture capital investments become increasingly sophisticated and innovative and seek new pools of investors, including Islamic investors, growth in Islamic private equity and venture capital funds can be expected to mushroom.

Islamic Private Equity and Real Estate Funds

December 2007 | Bernardo Vizcaino, Eurekahedge

Amongst the various asset classes on offer (from equity funds to alternatives), Islamic finance has developed a wide range of products in the areas of real estate and private equity. There are various reasons for this, but key drivers include the predilection of Shariah-compliant structures towards asset-backed investments, and more recently the burgeoning activity observed across the GCC region in these two asset classes.

Shariah Governed Asset Management

November 2007 | Denise Valentine, Celent

The Shariah asset management industry is small but growing. Shariah investment products are found most easily on the equity side of the business. The Shariah committee screens or filters listed securities according to the restrictions and requirements of Shariah law. Portfolio managers then use the approved list of securities to construct an investment portfolio. For the bond and derivative asset classes, an entire industry has yet to be developed, and capital market participants are just gearing up to the market’s demand for products.

The Evolution of Malaysian Islamic Funds

November 2007 | Bernardo Vizcaino, Eurekahedge

Malaysia remains firmly ahead of its peers in Southeast Asia in terms of the development of Shariah-compliant funds. Nonetheless, the industry has had to change over the years not only to retain this lead but also to respond to client demands for more diverse investment choices. It is the nature of this evolution that we seek to analyse, by looking at a wide range of metrics (from industry make-up to historical performance) of funds originating from this country.

Islamic Private Equity Outgrowing Conventional Private Equity

October 2007 | Catharina-Sophie Bescht, CORECAP

Islamic finance has witnessed tremendous growth over the past years, both in terms of the growth of the entire industry and in terms of the development of new and more sophisticated products that meet the increasing yet unmatched demand for structured products and comply with the principles of Shariah law. The global Islamic finance industry is valued today at approximately US$800 billion.

Islamic Funds in Egypt

October 2007 | Bernardo Vizcaíno, Eurekahedge

While our research and analysis has sought to identify global trends in the industry, we direct our analysis towards Egypt and its emergence in the Islamic finance industry in this article. In terms of product development, we place our attention on the various Shariah-compliant funds that have emerged over the last few years, and while their number remains small it is the speed of development that is worthy of note.

The Dawn of Islamic Finance in Japan

September 2007 | Tadashi Maeda, Japan Bank for International Cooperation

One of the major characteristics of the recent development of Islamic finance is that non-Muslim western financial institutions are becoming more actively involved in this rapidly growing industry. The UK, the US, Germany and other Organization for Economic Cooperation and Development (OECD) countries have major financiers that are expanding Shariah-compliant businesses. Unfortunately, this is not the case with Japan, which has only a small Muslim population at the moment. However, Asia’s largest economy will not be silent for much longer. Islamic finance in Japan has now begun to dawn.

Key Trends in Islamic Funds

July 2007 | Rajeev Baddepudi, Bernardo Vizcaino, Eurekahedge

The Eurekahedge Islamic fund database has grown considerably from its launch last year to now encompass information on more than 458 Shariah-compliant funds (representing a 95% coverage of the market). Our analysis focuses on factual data, allowing it to be comprehensive as well as reliable. The Islamic fund platform encompasses funds from across all asset classes (equity, fixed income, real estate, private equity, etc) and our estimate of the total universe stands at approximately 480 funds, with 500 a feasible industry milestone by year end.

American Islamic Private Equity Transactions: Successes, Challenges and Opportunities

July 2007 | Umar F Moghul, Murtha Cullina

Although the bulk of activity and growth in Islamic finance lies in the Muslim world, the US remains an important market for many Islamic investors because of its depth and diversity. Many foreign-based institutions that have long invested in the US continue to do so, and many new, significant entries have been made over the last few years. As Islamic finance has grown both quantitatively and qualitatively worldwide, so have the number and sophistication of its participants.

Shariah-compliant Private Equity Funds: What Private Equity Managers Need to Know

June 2007 | Marwan Al-Turki, Debevoise & Plimpton LLP

The forging of new relationships with Middle Eastern investors (beyond those with the region’s merchant families and investment houses which have, for some time, been investors in the private equity asset class) has brought with it new and complex issues of culture, commerce and religion. In light of the compelling size of the pool of available Islamic capital estimated at between US$300-500 billion, private equity funds and their general partners (GPs) may be well advised to learn about accommodating the concerns of Islamic investors.

Islamic Finance (Finally) Taking Root in North America

June 2007 | Stephen Lange Ranzini, University Bancorp

Despite the reported US$276 billion in assets that Islamic finance holds globally (according to a recent KPMG study), the industry has only recently broken the billion dollar mark in the wealthiest and most diverse nation in the world, which although predominantly Christian, has the largest Muslim population outside the Muslim nations. While the size of the Muslim population in the US and Canada is not known because government statistics, including census data, by law cannot collect religious affiliations to prevent discrimination on the basis of religion, it is estimated by researchers to be nearly 10 million strong.

China’s Scope for Islamic Finance

May 2007 | Nora Salim, Islamic Finance news

China is one of the strongest and fastest growing economies in the world, as confirmed by the 2006 figures released on 25 January 2007. These figures from the National Bureau of Statistics confirmed that the country has continued on its growth track of over 10% growth for the last four years by registering a 10.7% growth in 2006, surpassing the 10.5% predicted by officials. This most recent rise is credited primarily to investments and exports.

Islamic Financial Products in Indonesia

March 2007 | Bernardo Vizcaino, Eurekahedge

Being the world’s most populous Muslim nation, Indonesia is certainly a market that gathers a lot of attention in this developing industry. There is no lack of interest as it presents a sizeable marketplace (a population of 242+ million) and caters to the growing appetite for merging market products (forecasted GDP growth of close to 6% for the next five years).

New Trends in Islamic Funds

February 2007 | Bernardo Vizcaino, Eurekahedge

As the development of Islamic finance continues, it is increasingly possible to establish with greater certainty industry trends and product characteristics. While transparency remains a goal rather than an achievement, there are several tools and proxies available to do this. Thus we continue our effort of relying on quantifiable data in order to minimise the use of estimates and maximise the accuracy of our analysis.

Takaful Funds - An Overview

February 2007 | Professor Dr Mohd Ma'sum Billah, Director, Global Trade and Investment Cooperation (OIC Zone) Islamic Chamber of Commerce and Industry (ICCI)

Takaful literally means shared responsibility, shared guarantee, collective assurance and mutual undertakings. Thus Shariah-compliant insurance is based on shared responsibility, mutual co-operation and solidarity and is designed to protect the participant against a defined risk. Takaful schemes are free from elements of gharar (uncertainty) in respect of premium and coverage, maisir (gambling) and riba (interest).

Positioning Malaysia as an Islamic Financial Centre

January 2007 | Jennifer Chang, Executive Director PricewaterhouseCoopers, Malaysia

In line with the Malaysian Government’s efforts to promote Malaysia as an Islamic Financial Centre (IFC), the 2007 Budget announcements on the 1 September 2006 provided substantial tax incentives in the area of Islamic finance. The new incentives give an opportunity for Malaysia to capitalise on an influx of liquidity, particularly from the Middle East. Middle Eastern investors are looking into modes of financing and investment that not only provide similar returns compared to conventional financing and investments, but are also in compliance with Islamic religious principles.

Governance Issues and Islamic Banking

December 2006 | Professor Bala Shanmugam, Vignesen Perumal, Monash University Malaysia

Corporate governance refers to the method by which a corporation is directed, administered or controlled. It includes the laws and customs affecting that direction, as well as the goals for which it is governed. Corporate governance mechanisms and controls are designed to reduce the inefficiencies that arise from moral hazard and adverse selection. Corporate governance is also viewed as a process of monitoring performance by applying appropriate counter-measures and dealing with concepts such as transparency, integrity and accountability.

2006 Overview: Key Trends in Islamic Funds

October 2006 | Rajeev Baddepudi, Bernardo Vizcaino, Eurekahedge

Islamic investments have garnered interest over the years and have gained momentum not only from established participants but also from a variety of new entrants. While some outsiders would care to refer it as a subset of the socially responsible industry, the informed observer will note that the industry has taken a life of its own and is poised to develop further.

Invitation to Trial Eurekahedge Islamic Fund Database

August 2006 | Eurekahedge

The launch of the Eurekahedge Islamic Fund Database last month was a success and we have been receiving great feedback from interested parties. As part of our launching campaign, we would like to invite our readers to a 1-week trial to this database. The Eurekahedge Islamic Fund Database was launched with 312 funds compliant with Shariah law and comprehensively covers across all geographies and asset classes including: unit trusts/mutual funds, funds of funds, private equity funds, alternatives and structured products.

The World's Largest Interactive Islamic Fund Database and Directory

July 2006 | Eurekahedge

Eurekahedge announces the launch of the largest Shariah-compliant fund database: the Eurekahedge Islamic Fund Database and Directory. The database launched with 312 funds compliant with Shariah law. The specialist funds are comprehensively covered across all geographies and asset classes including: Unit Trusts/Mutual Funds, Funds of Funds, Private Equity Funds, Alternatives and Structured Products.

Development of Islamic Funds in Malaysia

May 2005 | Mohammad Faiz Azmi, PwC

The Islamic Financial Services Industry, comprising Islamic Banking, Islamic Insurance (Takaful) and the Islamic Capital Market are areas that have become an important segment within the global financial markets. Malaysia's objectives are to develop a viable Islamic Financial Services Industry.

Islamic Funds: Characteristics and Shariah Compliance

December 2004 | Eurekahedge

Due to previous years' shortfall of information and the relative youth of the industry, Islamic funds are only now receiving substantial inflows, considering the vast wealth of their potential client base, as discussed in last month's edition. Disconnect between the consumer and the product can be attributed to structural deficiencies in the market and informational gaps, as well as the historically oblique nature of Islamic finance. More transparency, as with any developing industry, is needed to earn investors' confidence.

2004 Overview: Key Trends in Islamic Hedge Funds

November 2004 | Eurekahedge

The modern Islamic fund management industry was born in the 1970s, when a new class of Arab investors, rich from oil profits and celebrating the 15th century of the Islamic calendar (Hijra) in 1976, sought a culturally-aware alternative to the "profit at all costs" mentality of western investing, particularly in interest-dealings. The industry has been growing ever since: Islamic banking is active in 75 countries and is growing at 15% globally, with an estimated $1 trillion waiting to be managed.

Islamic Fund Interview with Dr Hardeep Tamana, CEO Fyshe Group and CEO Crestar Islamic Asset Management

September 2004 | Eurekahedge

Dr Hardeep shares with us the services the Fyshe Group and Crestar Islamic Asset Management provide, particularly in addressing the islamic investment needs of the Muslim community.