AmIslamic Fund positioned as Islamic funds solutions provider, manufacturer

By Alfean Hardy
AmInvestment Bank Group Bhd's dedicated Islamic funds management division, AmIslamic Funds Management Sdn Bhd, is targeting to be a global Shariah-compliant funds management solutions provider and has set an internal target of doubling its funds under management within the next two to three years, its funds management division chief executive officer Datin Maznah Mahbob said.
AmIslamic Funds currently has about RM1 billion in terms of ethical assets under management. It was incorporated to become a dedicated entity last year and received its Islamic funds management license in January this year.
In her opening speech at a media briefing in Kuala Lumpur on Mar 2, Maznah said, for the last 20 years, AmInvestment's Islamic funds management business had been a window, now she wanted to position it as an Islamic funds management flagship that would provide solutions for markets in the region, the Middle East and beyond.
"AmIslamic Funds is supported by the whole AmInvestment infrastructure, from the funds, research and client support divisions to dedicated strategic product development team. It has had many firsts, including Malaysia's first Islamic fund based on total Islamic concept of Mudharabah fee, Amlttikal, in 1992," she added.
Speaking to reporters later, Maznah said AmIslamic Funds was not looking to follow where others have been. She said the strategy for the funds manager was to design and manage products for its clients.
"We target our clients and offer solutions direct to them. As a relatively small player, from a global perspective, we are able to offer more time, energy and effort in customisation solutions," she said. "If you're a global player, it may not be worth your while as this is from a zero base situation. Most big players already have ready-made products and investment solutions on their menu, which they need economies of scale, and many of these products may not comply with the stringent Shariah needs of the clients that we're thinking of," she added.
Maznah said AmIslamic Funds was set up to listen to what the clients wanted and gave no judgement on their intepretation of Shariah compliance.
"We position as ourselves as the manufacturing arm for our clients. The client gives us the parameters and we will ensure the product is within the parameters, and then their Shariah advisers sign off on it," she said. "Some of the funds that we're customising for our institutionalised clients they on-sell as their own products. In a way we are designers and manufacturers and we don't mind that they onsell. We encourage it. In fact, many end investors don't know that they're buying into our own product," she added.

(This story appeared in The Malaysian Reserve on Mar 3, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)