Working with
Sharia Investors

The bfinance team works with Sharia/Shariah investors around the globe. We have Islamic clients located in the Middle East, South-East Asia and Australia. These institutions–including Pension Funds, Endowments, Family Offices, Wealth Managers, Development Banks and others–have very different needs and take a variety of approaches to Sharia investing.

Accessing the full range of Sharia opportunities

There is an increasingly wide range of investment strategies and managers that are appropriate for Sharia-compliant investors.

In private market strategies such as Infrastructure or Private Equity, managers continue to set up appropriate vehicles or are willing to do so if appropriate seed capital is available. Yet there can be low visibility on strategies—a problem which becomes particularly challenging in ‘niche’ asset classes such as Trade Finance or Equipment Leasing. In public markets there is often higher transparency (Equities, Sukuk, REITS), but databases and consultant lists do not reflect the full universe of potential providers that are able to tailor their strategies for Sharia clients. In equities, for example, an increasingly large number of asset managers are willing to apply Sharia screens to flagship products.

Sharia investors can also find that generic investment/risk models are not specific enough to address to their needs: strategic asset allocation and portfolio design frameworks that have been developed for a non-Sharia client base are not automatically applicable to Sharia clients.

Supporting Sharia investors’ needs

At bfinance, we seek to blend global perspective—drawn from working with a diverse range of sophisticated clients—with Sharia experience in order to provide highly appropriate solutions for Islamic investors.

The most popular bfinance services for Sharia investors have been manager search and selection and strategic asset allocation. In manager search, clients have been able to obtain a high degree of visibility on the opportunity set—including existing funds, customized portfolios and potential new launches. The team has helped to facilitate seed investment and advised on Sharia governance. Where the manager is offering a customized portfolio, researchers provide careful scrutiny of ‘carve-out’ track records to assess representativeness.

In strategic asset allocation / strategic portfolio design and risk analytics, models are developed through Sharia-specific analysis, with tailored capital market return and risk expectations. We believe that assessments should be based on asset classes and strategies that are accessible to Sharia investors and strategy development should reflect an understanding of the viable opportunity set which is available today for Sharia-compliant implementation. Other key services for this client group include operational due diligence and fee reviews.

Latest case studies

The client, a Middle Eastern insurance company, sought to refine its Shariah-compliant strategic...

A Middle-Eastern financial institution was seeking to create a new public equities product for its...

The client, a Middle Eastern foundation, was looking to enhance the returns of its overall...

The client, a prominent Middle Eastern asset manager, was seeking to invest in Shariah-compliant...

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