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Old Mutual launches Shariah-compliant hedge fund

Old Mutual Asset Managers (UK) has launched the Old Mutual Al Saqr Fund, an equity market neutral hedge fund that is managed in accordance with Shariah principles, including the use of Murabaha and Salam contracts, and leverages off OMAM's quantitative skills, including in-depth research and portfolio management capabilities.

The Al Saqr Fund will be managed by the same investment team that manages OMAM's global equity market neutral and global long/short equity strategies, including the Old Mutual GEM Plus Fund and the Old Mutual Global Sector Opportunities Fund, which have combined assets of around USD2bn. The Al Saqr Fund will be launched in April with a minimum of USD25m in assets.

The Al Saqr Fund trades globally in liquid stocks in developed markets, using a proprietary multi-factor quantitative model to compare stocks within the same sector across regions in order to exploit pricing inefficiencies.

It will typically contain between 200 and 300 Shariah-compliant stocks selected from the MSCI World Enhanced Index of approximately 3,300 stocks, which covers more than 90 per cent of global market capitalisation within the major developed markets of the US and Canada, the UK, Europe, Japan, Australia, Hong Kong, New Zealand and Singapore).

Says Eoin Murray, OMAM's chief investment officer: 'The launch of the Old Mutual Al Saqr Fund represents another milestone in the expansion of our hedge fund range. We believe there is significant and growing demand for funds that meet the specific religious and investment requirements of the Islamic community.

'The Al Saqr Fund has been designed in conjunction with a leading Islamic financial consultant and is fully compliant with Shariah principles. It offers Islamic investors access to OMAM's quantitative investment expertise without compromising their faith.'

The Al Saqr Fund will be domiciled in the Cayman Islands and denominated in US dollars, with a minimum investment of USD100,000. The prime broker is Fimat and the Shariah adviser is Ratings Intelligence.

Old Mutual Asset Managers (UK) is a specialist investment manager focused on high performance and absolute return products, and acts as investment manager to a range of hedge funds, multi-asset funds, structured products, unit trusts, Oeics and offshore funds.

It also manages investments for Old Mutual Fund Managers, the group's UK collective investment company which offers a range of unit trusts and Oeics investing in equity, bond and currency markets organised around OMAM's areas of investment expertise in quantitative strategies, discretionary equities, multi-strategy products and fixed interest.

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