Hedge funds seeking to attract investments of wealthy Muslims Abbarodoat “legitimate”
Heading global hedge fund managers to devise new tools are compatible with Islamic sharia law for the first time in order to create an Islamic market is expected to reach 50 billion dollars over the next three years. Said Co-CEO of the company Amiri Capital CB Richard Ellis that the global hedge fund industry’s $ 1.3 trillion (trillion = one thousand billion), seeking to attract surplus funds in the Islamic countries which are looking for investment compliant with Islamic law. The remarks were made by “Reuters” on the sidelines of an Islamic finance conference in Dubai on Wednesday 09/06/2006, it is often reluctant investors wealthy Muslims in the Persian Gulf from the entry of hedge funds to adopt strategies that do not conform with Islamic law. And hedge funds Hedge Funds seeks to achieve returns are guaranteed as much as possible through the management of investment portfolios are carefully selected and a hedge, and could include shares and bonds as well as investment in assets such as real estate, as well as gold and precious metals, paintings and other art.
Said Alice, “but a number of fund managers trying to develop Shariah compliant strategies that mimic strong returns of hedge funds and used part of the assets of Islamic valued at $ 750 billion invested in equity funds and real estate. “The Alternative Investment Market (which allows investment consistent with Islamic law) does not remember now.” “I do not believe that the case will remain so after 12 months there is a huge latent demand for Islamic products. The lack of side products.” Believes ‘by Amiri’ is an Islamic investment management company based in Britain and her partner in Bahrain, they found a way compatible with the law to simulate one of the traditional strategies of hedge funds are selling the debtor or a short sale.
The law forbids the photos a short sale because they involve the sale of a hedge fund for something not owned. Amiri plans to launch a global hedge fund to buy and sell shares short in 2007, says it would be compatible with the Sharia. Like its conventional counterpart strategy will involve buying a short sale to buy shares of the fund managers are expected to rise, and selling those that are expected to fall. Like its conventional counterpart strategy will involve buying a short sale to buy shares of the fund managers are expected to rise, and selling those that are expected to fall. But in the case of Amiri will be a short sale through a brokerage firm used its own capital instead of the fund. The agreement will allow participation in profit for the investors in the fund to benefit from the strategy. Ellis said the legitimacy of the Commission of five members, issued a fatwa authorizing this method.
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“Hedging” superior to conventional funds
Despite the strong performance of hedge funds traditionally mutual funds in most markets, investors in the Persian Gulf – the largest oil-exporting region in the world – they do not have the incentive to research investment in view of the proceeds of the enormous achieved by the stock markets in the region, but all this changed after the correction sharp in the stock markets this year. Most of the local stock markets in the region of the seven Persian Gulf, backing this year after a record rise in 2005, which rose by 70% on average. Legally, these funds take the form of Limited Liability Partnership, or fund institutional or mutual fund depending on the investment, location and type of investors targeted, and usually attracts this type of investment funds of people who are heads of large amount of money. Shall receive the managers of this type of fund fees are high Given the need to enjoy distinct efficiently up to 2% annually of the amount of capital invested plus 20% of the profits. And hedge funds of up in the world today to about 10 thousand representing approximately 3% of the total global investment is expected to increase the number of Ha by 20% a year until more than 25 thousand around the world in 2010, according to the expectations of Man Investments Corporation of America.
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