DUBAI, (Reuters) – Qatar First Investment Bank (QFIB) and specialist regional asset manager Gulfmena Alternative Investments plan to set up a Shariaa-compliant asset management firm to tap into rising demand for Islamic investment products.
The new company will be majority owned by QFIB, while Gulfmena will manage the investments, the companies said in a joint statement on Monday.
“We believe there is tremendous opportunity given the growth prospects of the Shariaa compliant financial sector,” said Haissam Arabi, chief executive of Dubai-based Gulfmena.
Demand for Islamic investment products is expected to rise as more investors demand asset management tools which are compliant to Islamic laws.
The new firm is slated to launch in the fourth-quarter and will provide a full range of Shariaa-compliant products and services across all asset classes.
The asset management firm will cater to qualified investors such as Islamic banks, foundations and charitable organisations and will seek to be regulated by the Qatar Financial Centre Regulatory Authority after an initial temporary offshore establishment, the statement said.
The firm will have its own Shariaa supervisory board.
The asset management sector forms a small part of the fast growing $1 trillion Islamic finance market, giving ample room for fund managers to tap growing potential of the market. In a recent report, Ernst & Young estimated the size of the Islamic asset management industry at about $52 billion, comprising a little over five percent of the entire industry size.
The report said the Islamic asset management industry had “plateaued” during 2009 with the number of fund launches getting offset by funds liquidated.
QFIB was launched in 2009 and is the first, non- affiliated Shariaa-compliant investment bank to be regulated by the Qatar Financial Centre Regulatory Authority.