Islamic Wealth Management gif
mance at the moment include the fact that it has not yet se- cured a financial investor for a securitisation conduit for its Ijarah jumbo financings.
Devon Bank, a community bank based in Chicago, owned and run by a locally prominent Jew- ish family, is the clear leader in Islamic commercial real es- tate investment , with perhaps US$20 million in its portfolio.
A conventional investment player that has entered the Islamic market recently is Ca- lyx Offshore. Whilst the Calyx brand deals with work within conventional-sector investment strategies, the company’s Is- lamic brand, Codexa Capital, focuses on providing specialist sharia’a-compliant investment banking solutions for those clients interested in Islamic wealth management.
Leading companies Which companies should you turn to when seeking out Islamic wealth management opportunities in North America? The lead- ing institutions are the aforementioned UM Financial Inc; Guidance Financial, Saturna Capital’s Amana Mutual Funds, University Bank’s University Islamic Financial and De- von Bank. Other players of note include busi- nesses such as La Riba Finance House and its affiliate partner Bank of Whittier.
Saturna Capital’s Amana Mutual Fund group has over US$525 million under the man- agement of Islamic equity mutual funds. Powered by an emphasis on oil stock invest- ments, Amana was the top performing so- cially responsible mutual fund in 2005.
Saturna is the oldest and most profitable of the North American Islamic finance firms. As a result of their excellent performance, the two Islamic Amana Funds are now attracting many non-Muslim investors and are grow- ing by millions of dollars per month. Other smaller competitors to the Amana Funds are Azzad Asset Management and Allied Asset Advisors.
University Islamic Financial offers, through its brokerage affiliate, the Amana Islamic Equity Mutual Funds. Future plans include product expansion for additional invest- ment options and Takaful, so that it can be a turnkey supplier of all financial services products, not just to its clients, but to other financial institutions across the USA on a wholesale basis. Current gaps in its perfor-
Figure 2: Funds by Geographical Mandate 2008
9% North America 29% MENA 23% Globe
Headquartered in New York, Codexa oper- ates through several affiliations across the Islamic finance industry. Its specialist areas include cross-border, Transnational and mul- tilateral activity, therefore helping American Islamic wealth management reach out to the world. Table 3 shows that Codexa offers exactly the same suite of services as Calyx, meaning that the company clearly takes Is- lamic finance seriously and sees sharia’a- compliant wealth management in particular as a strong area of opportunity and growth.
Coming up With so many factors in North America’s fa- vour regarding potential for Islamic finance with a High Net Worth Individual client base, it is not impossible to see the expansion of sharia’a-compliant wealth management eventually taking place in this part of the world.
The financial crisis, which originated in the continent’s Subprime market, has driven investors to seek out real investments. In Islamic wealth management, they may find the alternative they’re looking for.
We can not, however, assume that the ex- pansion of the sector will be automatic. Some elements that need to be worked on to ensure success include the willingness of service providers to offer the relevant prod- ucts; the effective and sharia’a-compliant nature of the actual product development; and initiative combined with creative think- ing. If these threads can be pulled together in correlation with North America’s rising Muslim population and increasing interest in ethical finance and investment, there’s no telling how high the region’s Islamic wealth management sector could go.
gif
4% Europe
1% Emerging Markets
34% Asia Pacific
Figure 3: Asset distribution
20% 30% 40% 50% 60% 70%
10% 0%
Geographical Mandate
Assets under Management
Source: Eurekahedge 2010 October Global Islamic Finance 35
Number of Funds
Additional reading:
• Eurekahedge. 2008. “Key trends in Islamic funds 2008”. Hedge Fund Monthly. • Mujahid, Abdul Malik. “Muslims in America”. Allied Media Corp. • Khan, Mohemmed Athar. “Good In- vestment: Turning to Islamic Wealth Management”. Business Islamica. 4(2) 2010. • Ranzini, Stephen Lange. 2007. “Is- lamic Finance (Finally) Taking Root in North America”. Islamic Finance News. • Bhatty, Ajmal. 2010. “Takaful in North America: a global view for local per- spective”. New Horizon.
% of Total
Asia Pacific
Emerging Markets
Europe
Global Middle East/ Africa North
America
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