Waha Capital, which counts Abu Dhabi’s Mubadala Investment Company as one of its shareholders, launched a new income-generating Sharia-compliant fund in response to growing demand from investors and expects it to attract more than $500 million (Dh1.83 billion).
The open-ended Waha Islamic Income Fund SP will invest in Sharia-compliant assets in sukuk and equity markets globally, Waha Capital said in a statement on Sunday.
“While our existing funds have some Sharia compliant elements in them, there has been a steadily growing demand from our existing clients over the past couple of years for us to develop such a fully-fledged Islamic fund,” said Amr AlMenhali, chief executive officer of Waha Capital.
The $2.4 trillion Sharia-compliant finance industry is expected to register “low to mid-single-digit growth” this year and in 2021, according to S&P Global Ratings. The industry registered strong growth of 11.4 per cent last year on the back of sukuk issuance that was higher than expected. The volume of Islamic bond issuance will drop to $100bn this year, from $162bn reported last year when Turkey, GCC issuers, Malaysia and Indonesia supported the market.
Saudi Arabia will remain the world’s largest Islamic banking market, while the sector will continue to expand rapidly in Malaysia, according to Moody’s Investors Service.
Waha Capital’s new actively-managed Islamic fund is the fourth within its asset management business.
“We are confident that the new fund will be well received because it avoids investment in prohibited or controversial activities or assets and business sectors that may be considered as particularly risky or potentially volatile,” Mr AlMenhali said. “It will also only invest in entities that have relatively low gearing.”
The Abu Dhabi-listed investment company plans to develop a full Sharia-compliant offering to meet investor demand for Islamic products.
“We are positioning this new fund as a focal point around which we can build a whole Sharia compliant offering,” Mr AlMenhali said.
Waha Capital swung to a profit in the second quarter on the back of a higher operating income. Net profit attributable to owners of the company for the period ending June 30 reached Dh267.2m, compared to a loss of Dh124.3m during the same period last year.
Its private investment business, which targets a diverse range of sectors, recorded a net profit of Dh3.2m compared to a loss of Dh186.1m in 2019.
The company manages assets across sectors including healthcare, financial services, energy, infrastructure, industrial real estate and capital markets.
Waha Capital is also eyeing investments in a number of US-listed companies operating in healthcare, technology and telecoms with a total investment of $120m, it said earlier this month. In August, the company said it invested Dh184m in New York-listed online travel company Despegar.com.
The Abu Dhabi-based company currently has investments in firms including Dubai-based FinTech company Channel VAS, Dunia Finance, National Energy Services Reunited and Petronash Holdings, among others. It divested its stake in New York-based aircraft leasing company AerCap last year that generated net cash of Dh933m to the company.
Total assets at the end of June reached Dh9.49bn, up 2 per cent since the end of 2019.
Waha Capital’s investors are a diversified mix of institutions including pension funds, endowments, sovereign wealth funds, and family offices from North America, Europe and the Gulf. Waha Capital also invests in its own funds.
Among its three existing funds is the Waha Central and Eastern Europe, Middle East and Africa (CEEMEA) Credit Fund, which invests in emerging markets. It generated a cumulative return of more than 180 per cent since its inception in 2012 to the end of 2019.
Source: The National