The global Islamic finance market is projected to reach $3.69 trillion by 2024, fuelled by growing interest in Shariah-compliant capital by both Muslim and non-Muslim countries, according to a recent report.
The Islamic finance assets recorded a compound annual growth rate of 7.8 percent globally between 2014 and 2019, said the report by Ocorian, a leading fund manager.
“Through our office in Dubai, we see a growing number of US fund managers increasing their fundraising efforts in the region, including hiring locally to promote investor relations,” Marc van Rijckevorsel, head of corporate and fund services – Americas Region at Ocorian, said.
He said the US was seen as the most favoured destination for capital rich investors from the GCC region, especially those from UAE, Saudi Arabia and Kuwait, besides Malaysia.
Ocorian said an increasing number of US fund managers were approaching it to help raise Shariah-compliant capital.
“However, in order to be successful, they need to focus more on navigating structural and cultural challenges,” it said.
Rijckevorsel said the investors from the GCC and other countries were seeking yield for big ticket items, including in the US.
“However, these investors have limitations on the investments due to Shariah principles. That meant GCC investors tend to favour real assets in property and infrastructure,” he added.
Ocorian said it was increasingly seeing US fund managers attracting investors and then setting up a specific feeder structure tailored to enable the Shariah-compliant investor to invest into the fund.
It said approximately 80 per cent of the time these investments are structured that way, with the legal adviser designing a structure using SPVs in, for example, Cayman or Jersey to facilitate investment into the main US or Cayman fund structure.
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