Regional financial institutions, Gulf Finance House (GFH), Kuwait Finance and Investment Company (KFIC) and Qatar Islamic Bank (QIB) announced yesterday the launch of the $400 million Al Basha'er GCC Equity Fund, an Islamic equity fund offering investors an opportunity to take part in the surging growth of the region's capital markets.
The partners have also forged major collaborations with Abu Dhabi Commercial Bank, Gulf Bank and Gulf Finance House Commercial Bank for the fund as exclusive placement agents in the UAE, Kuwait and Bahrain respectively.
The fund, which offers monthly subscriptions and redemptions, will be under the supervision of the Bahrain Monetary Agency (BMA) and will adhere to all mutual fund-related rules and regulations.
The fund will be jointly managed by GFH and KFIC, investing selectively in stocks of listed as well as unlisted Sharia-compliant companies in the region.
Elaborating on the new initiative Esam Janahi, chief executive officer of GFH, said: "A distinctive feature of the fund is its partnership with the region's leading financial institutions, which enables it to benefit from the rich pool of expertise and knowledge of the GCC markets."
"The fund will capitalise on the bright prospects of the GCC markets, encouraged by buoyant oil prices, high liquidity, low interest rates and strong corporate fundamentals. The size of the fund at $400 million makes it the region's most significant offering," he said.
"Investments will be based on stock picking and the opportunistic style of management and not indexing, while ensuring efficient management of risk," said Abdulrahman Al Saeed, KFIC vice-chairman and managing director.
The dollar-denominated fund aims at capital appreciation through investments in select equities that comply with Sharia investment guidelines.
It is open for subscription on a monthly basis and can be redeemed at net asset value after a two-month lock-up period.
The total size of the initial offer to the market is 40 million units. The fund opened for initial subscriptions on October 9 for one month.
The minimum initial subscription in the fund is $10,000, followed by subsequent investments in tranches of $3,000. The minimum holding limit in the fund is pegged at $3,000.