Islamic assets under management may have declined 12.2% to $84 billion last year, but that figure masked a wide range of successes and failures (see tables below).

Certain fund houses recorded substantial falls. HSBC Saudia Arabia saw the biggest drop in both percentage (36%) and absolute AUM ($1.34 billion) terms, while RHB Asset Management suffered the biggest decline among Malaysian firms.

Negative sentiment – particularly on emerging markets – was partly to blame, as was the prevailing low oil price for Middle Eastern firms, as reported previously.

On a more positive note, some asset managers bucked the trend and posted strong growth, India’s Tata being the clear standout, albeit growing from a very low base.

Franklin Templeton did well to expand its Islamic AUM by 29% to $1.59 billion last year, given that it already had a substantial asset base. Growth was solid across all asset classes on the back of healthy flows from institutional investors in Malaysia. 

The increase was significant for the fact that much of the investment was new money, not top-ups from existing clients, said Sandeep Singh, chief executive of the Islamic business and country head for Malaysia.

In the Middle East, Dubai-based Rasmala Investment Bank’s sharia funds business posted 56% asset growth, driven largely by alternative investments. Indeed alternative strategies generally were a bright spot amid the gloom in the Gulf region last year, as reported this week.

Rasmala’s Islamic alternative portfolio expanded 148% to $222.4 million to become easily the biggest share of its $371 million in sharia AUM (and its $1.1 billion in AUM overall, including conventional assets).

The firm’s alternative assets incorporate strategies with exposure to equipment leasing, trade finance and real estate, noted Eric Swats, Rasmala’s head of asset management in Dubai.

Asked what has driven demand for these investments, he pointed to several factors: these strategies’ low correlation to public equity and debt markets; they all have some focus on income; and they are focused on opportunities outside the Gulf region, thereby satisfying growing local demand for geographic diversification.

The figures were compiled by Bernice Cornforth. The full feature appears in the March 2016 issue of AsianInvestor. For a list of the biggest 50 sharia managers overall, click here; for the biggest managers in Southeast Asia, click here; and for the biggest managers in the Middle East, click here.

Managers of sharia funds: 10 fastest growing firms in 2015
2015 Company Geography Total 2015
($ million)
Total 2014 Y-o-Y growth
1 Tata Asset Management India 73.3 3.5 +2,017.6%
2 NBP Fullerton Asset Management Pakistan 131.6 63.7 +106.7%
3 Hong Leong Asset Management Malaysia 169.0 102.5 +64.9%
4 Rasmala Investment Bank UAE 370.9 237.7 +56.0%
5 Schroder Investment Management UK 76.8 59.0 +30.1%
6 Franklin Templeton Investments US/Malaysia 1,593.0 1,236.0 +28.9%
7 ANB Invest Saudi Arabia 1,001.4 825.7 +21.3%
8 Allied Asset Advisors United States 75.0 65.0 +15.4%
9 Saudi Hollandi Capital Saudi Arabia 372.0 323.2 +15.1%
10 Maybank Asset Management Malaysia 2,040.8 1,810.2 +12.7%

Managers of sharia funds: 10 fastest shrinking firms in 2015
2015 Company Geography Total 2015
($ million)
Total 2014 Y-o-Y fall
1 HSBC Saudi Arabia Saudi Arabia 2,367.0 3,703.0 -36.1%
2 Absa Capital South Africa 2,009.2 3,079.2 -34.7%
3 Samuel Asset Manajemen Indonesia 50.2 75.4 -33.4%
4 RHB Asset Management Malaysia 1,060.5 1,562.4 -32.1%
5 Falcom Financial Services Saudi Arabia 415.4 609.0 -31.8%
6 TA Investment Management Malaysia 48.8 67.0 -27.3%
7 Kagiso Asset Management South Africa 75.4 100.2 -24.8%
8 Oasis Crescent Management South Africa 1,138.3 1,476.7 -22.9%
9 Comgest Growth France 123.1 158.3 -22.3%
10 CIMB Islamic Malaysia 4,747.0 6,001.6 -20.9%