US-based firm to launch two Shariah funds

US-based Shariah Capital will launch two Shariah- compliant products, one of which will be a real estate fund, its chief executive officer said.

The new funds will be launched after Ramadaan this year, he said. The firm had launched four Shariah compliant funds in Dubai early this year.

"We look forward to launching a Shariah compliant real estate fund and a private equity solution this year," Eric Meyer, CEO of Shariah Capital, told Emirates Business.

Meyer, who advised the Dubai Gold Securities (DGS) the first Shariah compliant Exchange Traded Fund (ETF) in the Middle East, said he sees more ETFs being launched at Nasdaq Dubai this year.

The company will launch all its products in future in Dubai, a place Meyer says has a "strongest infrastructure and best connectivity" in the Middle East.

Shariah Capital along with the Dubai Government formed the Dubai Shariah Asset Management that launched four funds in Dubai early this year. The funds include DSAM Kauthar Gold Fund (DKGF), DSAM Kauthar Energy Fund, DSAM Global Resources and Mining Fund Limited and DSAM Kauthar Natural Resources Fund Limited. The Dubai Multi Commodities Centre Authority (DMCCA) invested $50 million (Dh184m) into each of the initial four DSAM Kauthar funds as the seed investor, a total investment of $200m.

At 15.76 per cent returns by the close of March, DKGF was able to beat many of its peers. The other funds, however, have shown sober, and in one case lackluster performance.

Meyer said he now wants to move to products beyond hedge funds. "We see potential in ETFs, private equity solutions and real estate – the distressed part of it."

Shariah Capital maintains a board of Shariah scholars who advise the company on its products. The board members come from the UAE, Bahrain, Saudi Arabia, Malaysia and the US.

Meyer said the drafts for the company's new products is already being prepared by a new team of lawyers. "We are in drafting one of the solutions. My objective is to get things done after the summers and after Ramadaan," he said.

Backed with "millions in the bank and no debt", the company is outsmarting the downturn and is hiring new staff, Meyer said. "I have been very busy hiring some new talent. Based on the present environment we can now hire world class talent."

Meyer said, "Most large institutions looking to build suites of Shariah products are now insisting to only working with organisations with strong balance sheets and a strong proof of survivability. We seem to fit that bill."

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