Shuaa rolls out three Sharia-compliant investment funds with $75m of commitments

The company manages $13bn in assets and plans to expand its investment banking and asset management businesses

Shuaa Capital has launched three Sharia-compliant investment funds in the Abu Dhabi Global Market. Jaime Puebla / The National

Dubai investment banking and asset management firm Shuaa Capital launched three funds in the Abu Dhabi Global Market as the company continues to diversify its product portfolio and grow its fee income business.

The Sharia-compliant, open-ended funds were rolled out with initial commitments of $75 million (Dh275.25m), Shuaa said in a statement to the Dubai Financial Market, where its shares trade.

The funds, targeting qualified institutional investors, were launched through the company’s wholly owned subsidiary, Shuaa GMC, which is regulated by the ADGM Financial Services Regulatory Authority.

The three funds – Shuaa High Yield Sukuk Fund, Nujoom Aggressive Fund and Nujoom Balanced Fund – are part of Shuaa’s fund platform rolled out in Abu Dhabi’s international financial hub. The platform is expected to be the largest of its kind to be domiciled in ADGM, it said.

“The number of Sharia funds available to investors has yet to match the growing demand for Islamic finance products across the world,” Jassim Alseddiqi, chief executive of Shuaa, said. “This is because not enough fund managers offer options in the much sought after Sharia space, and even the funds available either have small AUMs [assets under management] or are close ended.”

The current climate of uncertainty amid the Covid-19 pandemic has created disruption in the global financial markets, opening up investment opportunities that may not have been available under normal market conditions, Mr Alseddiqi said.

The funds “are designed to give insurance and pension institutional investors more [investment] options while also supporting the Islamic investment industry”, he added.

Shuaa said its High Yield Sukuk Fund will invest in a portfolio of Islamic bond instruments, including high yield sukuk, Sharia-compliant fixed income investments and a number of other collective investment funds approved by its Sharia advisors.

The Nujoom Aggressive Fund and the Nujoom Balanced Fund will invest in a global portfolio of equities, fixed income investments and money market instruments that follow Sharia guidance. The funds offered through the Allfunds Bank platform will widen choices for investors with a long-term investment horizon, Shuaa said.

“Our umbrella fund gives investors the option and comfort of investing in a regulated fund structure that is diversified, achieves cost-efficiencies and economies of scale, and creates consistent and long-term value,” Ajit Joshi, Shuaa’s head of public and private markets, said.

Shuaa manages $13 billion in assets and plans to expand its investment banking and asset management businesses to boost AUMS to $20bn.

Shuaa’s expansion strategy involves growing its regional footprint as it looks to grow recurring income through new products, permanent capital vehicles and expanding its fixed income business, the company said in March.

In June, the company strengthened its corporate restructuring arm to help struggling firms access financing during the Covid-19 crisis. In August, Shuaa reported a second quarter net profit of Dh267m and a first-half net income of Dh5m despite the pandemic-related slowdown. There are no comparable figures as Shuaa merged with Abu Dhabi Financial Group last year.