Barclays Capital, the investment banking division of UK-based Barclays Bank, and the Dubai Multi Commodities Centre Authority, an agency of the Dubai government, have unveiled the first Sh
Barclays Capital, the investment banking division of UK-based Barclays Bank, and the Dubai Multi Commodities Centre Authority, an agency of the Dubai government, have unveiled the first Shariah-compliant hedge funds to be launched on the Al Safi Trust alternative investment platform.
The Dubai institution has committed to seed five commodity hedge fund managers on Al Safi with USD50m
each for a Shariah-compliant fund of funds product to be offered under the Dubai Shariah Asset Management brand.
The commodity hedge fund managers and strategies and approved by the authority are Tocqueville Asset Management (gold), Lucas Capital Management (energy/oil and gas), Zweig-DiMenna International Managers (natural resources), Ospraie Management (agriculture)
and BlackRock (global resources and mining).
Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre Authority, says: ‘DMCC is pleased to work with Barclays Capital and Shariah Capital to offer the first Shariah-compliant hedge funds on the Al Safi Trust alternative investment platform. We have worked closely with our international partners to engage world-class fund managers with excellent track records to offer investors premium Shariah-compliant investment solutions.’
Al Safi is a Shariah-compliant platform comprised initially of single-strategy
alternative investment managers, with Shariah Capital as the Shariah advisor and Barclays Capital as the prime broker and structured product distributor.
Designed as a ‘plug and play’ solution for managers, Al Safi offers an established process of due diligence and accepts only hedge fund strategies and managers that meet the criteria of its Shariah Supervisory Board.
Its aim is to provide Islamic investors with the same high-quality managers and strategies available to conventional investors, including comparable returns, competitive fee levels, diversification across asset classes and access to customized structured products which can provide full capital protection, within a pre-established Cayman trust framework.
Shariah Capital chairman and chief executive Eric Meyer says: ‘With the capital support of a sovereign government and the prime brokerage and structuring expertise of Barclays Capital, the Al Safi Trust platform is a historic development that unites modern investment strategies with Shariah.
‘The initial commodity hedge fund managers who will be available through Dubai Shariah Asset Management are truly world-class. They represent the best and most successful commodity strategists in the world, and they have agreed to accommodate Shariah within the strict guidelines established by our Shariah Supervisory Board.’
The Dubai Multi Commodities Centre says Al Safi has been created in response to market demand for Shariah-compliant alternative investments and the considerable impediments fund managers have faced meeting that demand.
Other long/short equity managers will be announced shortly for the Al Safi platform, which is expected to include a range of alternative investment strategies as well as specialised investment funds.
‘The DMCC’s provision of seed capital for five fund managers on Al Safi is a strong affirmation of the robustness of the platform’s Shariah framework and an exciting development in the alternative investments available to Islamic investors,’ says Richard Ho, head of fund-linked derivatives at Barclays Capital.
Dan J. Rice, a managing director and portfolio manager for BlackRock said, ‘The Middle East is a fast-growing market, with estimated investment assets of more than USD3trn. BlackRock has already made strong progress in the region building extensive relationships, and we look forward to creating an attractive platform of investment opportunities for the Islamic investor.’
David Rutledge, the chief executive of the Dubai Multi Commodities Centre Authority, adds: ‘The Al Safi platform is ideal for the Shariah-compliant asset management capability we are developing in commodities. It enables us to access exceptional managers with strong track records to deliver diversified exposure across a range of commodity sectors to institutional and individual investors interested in Shariah-compliant investment products and solutions.’
