AIIMAN to launch sukuk fund for global investors

Asian Islamic Investment Management (AIIMAN) is working with a 'large investor' from the Middle East to launch a sukuk fund for the global market targeting Southeast Asian investors. AIIMAN chief executive officer Nor' Azamin Salleh said the investor would chip in up to US$20 million (RM64.5 million) in the fund with a total size of US$100 million.

He said the fund is waiting for the seed fund from the investor and that the timing of the fund launch depends on the market scenario in the Middle East.

"Investors today have little appetite for risk, preferring the relative safety of fixed income-type funds that offer relative safety, stability and regular income distributions compared to equity funds in general," he told The Malaysian Reserve in a recent interview. As such, the sukuk will most probably be a fixed income fund and compliant to the Shariah standards of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

"We are working on a few ideas... more or less it will be a fixed income fund. The fund is for those who believe in Shariah principles as well as returns above the benchmark. It is for the global market with a focus on South East Asia," he said.

AIIMAN, 49% owned by Hwang-DBS (Malaysia) Bhd and the rest by Singapore’s DBS Asset Management Ltd, unveiled its first offshore themed fund, the HwangDBS AIIMAN A20 China Access Fund (A20) in March. Its first institutional offering, the HwangDBS AIIMAN Cash Plus Fund, was launched last year.

Nor' Azamin said the company is also busy getting some Middle Eastern investors to distribute its HwangDBS AIIMAN A20 China Access Fund, the world's first Shariahcompliant fund offering direct access into the highly restricted China's Ashares listed on the Shanghai and Shenzhen stock exchanges.

The US dollar-denominated fund will also be distributed to investors in the Asian regions, Middle-East and North South regions. Most of the efforts are focused on marketing the funds to clients in Singapore, Dubai and Bahrain, he said. AIIMAN, launched in November 2008, is currently managing about RM1.2 billion from its discretionary mandates and a total of five funds.

(This story, written by By Dalila Abu Bakar, appeared in The Malaysian Reserve on July 5, 2010. 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)