Kuwaiti firm Asiya Investments has launched a sharia-compliant income fund out of its recently opened Hong Kong office.
The Asian Islamic Trade Finance Fund will provide loans to producers and traders focused on raw materials, commodities and semi-finished products while meeting the specific requirements of sharia law.
After receiving its type 4 (advising on securities) and type 9 (asset management) licences from the Securities and Futures Commission (SFC) last July, the company bulked out its staff with 20 investment professionals who will oversee the portfolio.
The fund, which has an annual return target of 5% and quarterly liquidity, aims to give Middle Eastern investors exposure to emerging Asia.
“The fund acts as an intermediary by lending, on a fully secured basis, to producers and traders with operations focused on raw materials, commodities and semi-finished goods,” says Sulaiman Alireza, executive director of Asiya Investments Hong Kong.
“In doing so, we have created a mechanism that not only allows our investors to participate in Asia’s growth but also meets the specific requirements of sharia.”
According to Asiya, investors from Gulf Cooperation Council (GCC) countries are under-invested in the region, and have been seeking ways to expand their exposure to Asia via low-risk strategies.
“[The fund launch] comes at a time of continued growth within the Asian continent, as well as growing cross-border trade between GCC and emerging Asia,” says Ahmad Al-Hamad, group managing director of Asiya Investments.
The firm has invested more than $500 million in developing Asian economies in public and private equity, real estate and income strategies, across energy, real estate, infrastructure, financial services and consumer product sectors.
Asiya’s Hong Kong branch, along with its investment advisory arm Asiya Investments Dubai, are subsidiaries of the firm’s Kuwait corporate office.