UAE's Shuaa launches three Sharia-compliant funds in ADGM

Dubai: Shuaa Capital has launched three Sharia compliant funds and already secured $75 million of commitments.

The Shuaa High Yield Sukuk Fund, Nujoom Aggressive Fund and Nujoom Balanced Fund are the first Sharia-compliant funds within an ICC umbrella to launch in the Abu Dhabi Global Market (ADGM).

The funds platform is expected to be the largest of its kind to be domiciled in ADGM. The funds, and Shuaa’s fund platform within ADGM, are established and managed by Shuaa GMC Limited, a wholly owned subsidiary, which is regulated by the ADGM Financial Services Regulatory Authority (FSRA).

The Shuaa High Yield Sukuk Fund will invest in a diversified portfolio of sukuk instruments, including high yield sukuk, Sharia-compliant fixed income investments and other collective investment funds approved by the Sharia advisors. The Nujoom Aggressive Fund and the Nujoom Balanced Fund will invest in a global portfolio of Sharia-compliant equities, fixed income investments and money market instruments.

With the three funds, Shuaa’s aim is to serve institutional clients and its partners in the insurance industry. The funds, which are available to qualified institutional investors only, are offered through Allfunds Bank platform, the world’s largest fund distribution network, and will widen the choices available to insurance and pension institutional investors with a long-term investment horizon.

Under the ICC framework, each fund has its own segregated assets, and distinct investment strategies and mandates. Consequently, the assets of each fund will be invested for the shareholders of the corresponding fund and the assets of a specific fund are solely accountable for the liabilities, commitments and obligations of that fund.

“The number of Sharia funds available to investors is yet to match the growing demand for Islamic finance products across the world. This is because not enough fund managers offer options in the much sought after Sharia space, and even the funds available either have small AUMs or are close ended. As a result, the choice of strategies remains limited,” said Jassim Alseddiqi, Chief Executive Officer of Shuaa Capital.

“The current climate of uncertainty amid the COVID-19 pandemic has created disruption in the global markets, presenting our funds with investment opportunities that would not have been available under normal market conditions.”

Dar Al Sharia Limited acts as Sharia advisor to the funds. FAB Custody is appointed as the custodian, while Apex Fund Services serves as the administrator.