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Global launches Islamic fund of funds investing in local plus international funds

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Kuwait-based Global Investment House has launched the Global Islamic Fund of Funds, an open-ended fund of funds investing in local and international Shari’a compliant funds, including hedg

Kuwait-based Global Investment House has launched the Global Islamic Fund of Funds, an open-ended fund of funds investing in local and international Shari’a compliant funds, including hedge funds, real estate and private equity funds.

Sameer Al-Gharaballi – Executive Vice President at Global said: ‘The fund’s objective is to provide long term capital appreciation with reduced risk by investing in a diverse basket of Shari’a compliant funds and instruments.’

He added that the fund’s strategy is to invest the majority of its assets in a core of ‘carefully selected Islamic funds that complement each other in risk and return.’

The fund will also invest in low risk instruments to reduce the overall volatility of the portfolio. The rest of the fund will be invested opportunistically in new tools or funds that materialize in the future.

Badria Al-Humaidhi, Senior Investment Analyst in Global, pointed that the fund’s manager – Global –  has teamed up with AlRayah Consultancy to review and confirm that all the underlying managers comply with the Islamic Shari’a laws.

‘The fund aims to diversify its exposure in the global markets to minimize the risks associated with any one market as well as setting risk parameters to ensure that the fund is not overly exposed to any one market or sector,’ said Al-Humaidhi .

Additionally, the fund may invest in all types of funds similar -but not limited- to equity, real estate, hedge funds and private equity funds compliant with the Shari’a law.

Al-Humaidhi added: ‘There are over 300 Islamic financial institutions operating in 75 countries with combined assets exceeding USD300 billion, and an annual growth rate of 15%. Additionally, Islamic funds assets have had a rapid growth in the past decade, their AUM has exceeded USD300 billion as of 2006, with a significant amount attributable to the growth of the GCC stock markets.’

In terms of the management style, Faisal S. Quttaineh, Senior Manager – Investment Funds, stressed that the fund will enjoy ‘a strong, balanced mix of Global’s expertise in Islamic investments and experience in managing fund of funds.’

The fund’s minimum subscription is USD 25,000 with a monthly subscription frequency and quarterly redemptions after the lockup period.

Global has been tracking Islamic fund managers for over five years and its experience in the Islamic Financial Markets has resulted in the launching of three Islamic Real Estate Funds; Global GCC Real Estate Fund, Global US Real Estate Fund and Global Asia Real Estate Fund along with a range of Equity funds such as Al-Durrah Islamic Fund and Global Islamic GCC Large Cap Fund, as well as a money market fund, Global Islamic Fund.

Regarding the Investment Breakdowns, Quttaineh said: ‘The Fund’s investment breakdown involves 3 areas which are by type, Sector and geography. The breakdown per sector includes Real Estate Funds, mutual Funds and Fixed Income, the fund’s investments will cover the world geographically, where as the breakdown per type will include Real Estate and Fixed Income’. 

Global currently manages more than 30 investment funds of varying strategies and investment objectives. Global has built a track record in managing fund of funds. Since the company’s inception in 1998 it has managed seven funds of funds which include the Global Umbrella Fund – Europe, and the Global Distressed fund which was ranked third in the world with regards to its Sharpe Ratio in the EurekaHedge Database.

Global Investment House is a full-fledged investment company incorporated in 1998, and falls under the regulation of the Central Bank of Kuwait. Global’s stock is listed on the Kuwait, Bahrain, and Dubai Stock Exchanges, with branches and affiliates in Bahrain, Dubai, Abu Dhabi (UAE), Jordan, Qatar, and Sudan. Global is involved in promoting investment opportunities in the Arabian Gulf Peninsula to investors through the provision of financial engineering, in-depth research and reports, to advance the capital markets in the region. The company’s current assets under management reached KD2.130 billion (USD7.355 billion) as of 31 March 2007.

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