DMCC starts asset management initiatives linked to commodities

Dubai: The Dubai Multi Commodities Centre (DMCC) has launched two commodity-linked asset management initiatives that will offer investors both conventional and Sharia-compliant investment alternatives.

Executive chairman Ahmad Bin Sulayem said DMCC had applied for a licence to set up a company - Dubai Commodity Asset Management (DCAM) - that will develop commodity-linked investment products for distribution in the UAE and abroad.

DCAM will be established with an initial capital of Dh25 million. It will be 100 per cent owned and managed by the DMCC.

DMCC also said it would develop and manage Sharia-compliant investment products focused on commodities, through a joint venture between DCAM and Shariah Capital, a US-based, publicly-traded company on the Alternative Investment Market of the London Stock Exchange. The joint venture entity, Dubai Shariah Asset Management (DSAM), will be owned 51 per cent by DCAM and 49 per cent by Shariah Capital. As part of the initiative, DMCC has acquired a 4.99 per cent stake in Sharia Capital.

"DCAM and DSAM will serve as vehicles that offer the region's first commodity-linked Sharia-compliant investment products. We believe such products will be of great interest to institutions and high net worth individuals," said Sulayem.

Dr David Rutledge, chief executive officer, DMCC, said there had been an extraordinary growth in the global managed funds industry and in recent years the commodity managed funds have been growing at a compound annual growth rate of 98.2 per cent.

"DMCC's primary mission is to provide physical, financial and market infrastructure to all participants operating along the commodities value chain. Our initial objective was to develop the infrastructure critical for building a commodities marketplace in the region. We have done that. The launch of DCAM and DSAM sets similar goals in commodities management."