Islamic Asset Management

Forming the Future for Shari'a Compliant Investment Strategies
Erscheinungsjahr 2004
ISBN: 978-1-84374-121-3
Verlag: Euromoney

Buch, Englisch, 287 Seiten

A unique book, Islamic Asset Management combines the expertise of banks, asset managers, Shari'a scholars, service and distribution partners to provide you with the latest, creative innovative solutions in the provision of Shari'a-compliant investment structures.

Whether you are advising retail, high net worth, corporate or sovereign investors, on equity investments, sukuk, real estate investments, takaful and alternative investment vehicles, this book provides a comprehensive, global examination of Islamic asset management issues with contributions from the UK, US, the Gulf and Malaysia.

Through 19 individual chapters, experts in Islamic finance and practitioners across the industry provide you with all you need to know about:

Shari'a-compliant investment guidelines
Shari'a supervision
Screening criteria for Islamic equity funds
Islamic indexes
Islamic equities
Sukuk
Private equity investment
Investing in real estate and leasing funds
Takaful and health insurance plans
Legal and regulatory issues, investor confidence and governance Contributors include BUPA, DIFC, Dow Jones Indexes, Ernst & Young, ICP Ltd, King & Spalding LLP, NCB, National Bank of Sharjah, Oasis, Shamil Bank, Vinson & Elkins LLP, and Wafra.

Published in association with Kuwait Finance House and National Commercial Bank.

Autoren/Hrsg.

Jaffer, Sohail

Fachgebiete

• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Anlagen & Wertpapiere
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Internationale Finanzmärkte
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Bankwirtschaft
• Geisteswissenschaften Islam & Islamische Studien Islam & Islamische Studien

Inhaltsverzeichnis

Biographies

Editor’s biography

Contributors’ biographies

Foreword
Dr Zeit Akhtar Aziz, Governor, Bank Negara Malaysia, Kuala Lumpur

Editor’s introduction
Sohail Jaffer, CIO and Partner, FWU Group, Luxembourg

Part I: Shari’a-compliant investment guidelines

1 Islamic investment funds
Trevor L. Norman, Volaw Trust & Corporate Services Limited, Jersey

Introduction
Definition and asset classes
Structures
Investment selection
Purification of earnings
Trading issues
Conclusions

2 Shari’a supervision of Islamic funds
Shaykh Yusuf Talal DeLorenzo, Yasaar Limited, London

Introduction
The need for Shari’asupervision
Background to supervisory boards
Organisation of Shari’asupervision
Shari’a supervision as consumer advocacy
Funds without supervision
Shari’a supervisory functions
Monitoring fees
Internal processes
Board interfacing
Shari’a board compensation
Conclusions

3 Screening criteria for Islamic equity funds
Rodney Wilson, University of Durham,
Institute for Middle Eastern and Islamic Studies, Durham

Introduction
Principles and practices of Islamic equity investment
Differences between equity investment and musharaka and mudaraba
The advantages of fund management for Islamic equity investments
Sector screens for Shari’a compliance
Financial screening
Lessons from the ethical investment industry
Widening the remit for Shari’a screening

4 Islamic indexes: the DJIM framework
Rushdi Siddiqui, Dow Jones Indexes, New York

Introduction
Index construction
Role in the capital markets
Islamic indexes
Islamic screens: the DJIM approach
Impact of Islamic screens
Performance
Conclusion

Part II: Islamic investments

5 Restoring confidence to Islamic equity investors
Andrew Broadley, NCB Investment Services, Jeddah

Introduction
Anxiety factors
Transparency and accountability
Regulation
Conclusion
Contents

6 Latest developments in Islamic investments
Nizar A. Alshubaily, Shamil Bank, Kingdom of Bahrain

Introduction
Islamic equity builder certificates
Bai al-urboun
Islamic CDOs
Securitisation
Conclusion

7 Islamic fixed-income securities: sukuk
Nathif J. Adam, National Bank of Sharjah, UAE
Abdulkader Thomas, SHAPETM Financial Corp. And AJ IF.org, Virginia

Background
Shari’a principles and perspectives relating to sukuk
Sukuk implementation structures and parameters
Recent government and corporate issues and market trends
Potential of sukuk for fund management purposes
The road ahead for sukuk
Conclusion

8 Successful private equity investing: guiding principles
Nick D. Lodge, intellectual capital partners limited, London

Introduction
Private equity: asset class overview and comment
Private equity and Shari’a
Conclusion
9 Private equity: an Asian perspective
Darawati Hussain, Commerce International Merchant Bankers Bhd (CIMB), Kuala Lumpur

Introduction
Private equity defined
Portfolio asset allocation strategy
Meeting Islamic investors’ requirements
Shari’a issues relating to investments
CIMB Muamalat Fund 1
Case study: Big Tree
Conclusion

10 Models for development of Shari’a-compliant private equity and venture capital funds
J.C.F. Lufkin, Matrix Group, Manila, Singapore and Kuala Lumpur

Introduction
Investee assessments
Important design variables and common considerations
The models
Conclusion
Appendix: specimen investment memorandum

11 Investing in real estate funds
Khuram Hussein and Asif Iqbal, iHalal Financial Services, Dubai
Michael Samuels, Kleinwort Benson, London

Introduction
Property fund checklist issues
Shari’acompliance
Conclusion

12 Islamic leasing funds
Robert W. Toan and Monir Barakat, Wafra Investment Advisory Group Inc., New York

Conventional and Islamic leasing contracts
Structuring a US equipment leasing fund
Taxation of cross-border ijarah transactions
Credit enhancement in ijarah transactions
Strategic ijarah investments in emerging economies

Part III: Takaful life and health plans

13 Role of development policies in strengthening the takaful industry
James Hume, Dubai International Financial Centre (DIFC), Dubai

Introduction
Industry challenges
Conclusions

14 Islamic health insurance
Wayne Close, British United Provident Association (BUPA), Jeddah
William Essex, writer

Introduction
Contents

Shari’a-compliant insurance
Contractual issues
Islamic insurance in practice
Future prospects

Part IV: Legal and regulatory issues

15 Legal implications of structuring and offering
Shari’a-compliant investment products
Ayman H. Abdel-Khaleq, Vinson & Elkins LLP, Dubai

Introduction
Structuring Shari’a-compliant investment funds
Examples of Shari’a-compliant investment structures
Legal frameworks for the offering of Islamic funds
Conclusion

16 Structuring the Shari’a-compliant transaction involving non-compliant elements
Michael J.T. McMillen, King & Spalding LLP, New York

Introduction
A critical commonality
A rahn-adl collateral security structure
An istisna’a-ijarah construction and mini-perm finance structure
The new French credit bail immobilier structure
A residual interest sale structure in a South Korean securitisation
Conclusion

17 Building investor confidence through better governance and transparency
Sameer Abdi, Islamic Financial Services Group, Ernst & Young, Kingdom of Bahrain

Introduction
The need for branding
Developing a viable brand
Corporate governance and financial transparency: tipping the selection scales
Corporate governance: issues and leading practices
Financial transparency: issues and leading practices
Conclusions

Part V: Forming the future

18 The Islamic dinar and the Islamic Central Bank
Khalid Yousaf, Dubai International Financial Centre (DIFC), Dubai

Introduction
A new currency and central bank?
Currency basket linkage
The mechanics of reform
Conclusion

19 Achieving sustainable growth in Islamic finance
Adam Ismail Ebrahim, Oasis Group Holdings, Cape Town

Introduction
Regulation and standardisation
Benchmarks
Transparency
Solidifying the framework
Conclusions

Glossary

The co-publishers

Über Autor(innen)

Sohail Jaffer is a managing director of Premium Select Lux SA, an asset management subsidiary of the FWU Group. The company is based in Luxembourg and specialises in multi-manager funds. He is also a partner and CIO within the FWU Group, an independent financial services group headquartered in Munich. The group's main activities include asset management, life insurance and pension plans.

From July 1984 until September 1988 he was an audit partner with Price Waterhouse in Africa, and is a UK qualified accountant (FCCA).

From January 1989 until May 1998 Sohail was vice president of Citibank London. He was with the Financial Institutions Group until 1996, where his international business and product development activities included tailored principal-protected managed futures, commodities, hedge funds and equity derivative-linked investments for fund distributors in Europe and Japan. He managed a team focused on structuring customised principal-protected multi-strategy hedge funds.

He later joined Citibank's Alternative Investment Strategies Group, which formed part of Citibank Global Asset Management. There he was a director, and his responsibilities included business development and the distribution of multi-strategy hedge funds and collateralised high yield debt (CDO) funds to institutional investors and financial intermediaries in Europe and the Middle East. He was also a member of Citi's hedge funds policy and strategy committee, which was responsible for the fiduciary oversight of selected hedge fund managers.

From June 1998 until June 1999 Sohail was senior vice president within the International Mutual Funds Group of Scudder, Stevens and Clark Ltd, London, and was responsible for international product development in Europe and Japan. He is currently a council member of the Alternative Investment Management Association (AIMA) and chairman of the Middle East chapter. He also served as chairman of AIMA for two consecutive terms for the period 1997 to 2000.

He has published extensively on alternative investments, including editing Alternative Investment Strategies and Funds of Hedge Funds for Professional Investors and Managers, and contributing chapters to Evaluating and Implementing Hedge Fund Strategies (second and third editions) and The New Generation of Risk Management for Hedge Funds and Private Equity Investments, all published by Euromoney Books.