KFH forms JV shipping fund

Kuwait Finance House and Cyprus’ SFS Group have teamed to launch a $150m sharia-compliant private equity fund focused on shipping.

Kuwait Finance House Labuan, a fully-owned subsidiary of Kuwait Finance House (Malaysia), has entered into a joint venture with Cyprus Stock Exchange-listed SFS Group, a non-banking financial group with a primary focus on shipping and property, to launch a private equity fund focused on the shipping sector.

The firms are targeting $150 million for the sharia-compliant fund. The two firms will have equal ownership of the Cayman Islands-based fund management company, according to a joint statement.

The fund, to be launched before the end of 2009, will focus on investments in shipping assets and primarily in vessels to be chartered on a long-term basis. It will have a preference for investments in offshore ships. The fund has a seven-year life with a provision for three one-year extensions.

The collaboration is with SFS is consistent with Kuwait Finance House's strategy in the Middle East where it is focused on sectors such as shipping, aviation, healthcare and real estate, said Ab Jabar Ab Rahman, deputy chief executive officer of Kuwait Finance House (Malaysia).

Other details pertaining to the fund were not disclosed. Kuwait Finance House (Malaysia) could not be reached for comment.