New Shari’ah-compliant fund targets $100m

Investment company Al-Tawfeek has launched Bahrain’s first Shari’ah compliant private equity fund, targeting $100m (€83m).

Al-Tawfeek, a financial subsidiary of Saudi conglomerate Dallah AlBaraka Group, has launched a new private equity fund targeting $100 million (€83 million).

A press release touted the recently announced Al-Tawfeek Private Equity Fund as the first Shari’ah compliant private equity fund to be incorporated in Bahrain. The fund received approval from the Bahrain Monetary Agency in mid February of this year.

Shari’ah compliant funds have to conform to various Muslim principles such as not investing in gambling, pornography or arms. All transactions and practices have to be certified and passed by the Shariah board, a panel of respected Shariah scholars with expertise in Islamic law.

Al-Tawfeek will act as sponsor of the Middle East and North Africa-focused fund, while Bahrain-based Gulf Clearing Company will act as custodian and administrator. Al-Tawfeek will provide $20 million of seed funding for the new vehicle, which will have a five year fund life

The fund will focus on “late or expansion stage” Shari’ah compliant investments and seek to take advantage of the region’s developing capital markets, with IPOs as the preferred exit strategy. Sectors of potential interest include energy, telecommunications and IT, financial services and construction.

The Cayman Islands-incorporated Al-Tawfeek was established in 1992 as a financial investment company specialising in Shari’ah compliant products and has $1.5 billion under management. The company has been investing in the MENA region for over a decade.