Crescent Wealth, an Australian wealth manager working under Islamic guidelines, has partnered with Bank of London and the Middle East in a deal that gives Australian retail investors exposure to the Islamic bonds market.
Among the benefits of the agreement, Crescent Wealth said, is that investors in the Crescent Islamic Cash Management Fund will gain exposure to the global market for Sukuk, or Shariah-compliant bonds, estimated to be worth a total of $150 billion or more. The portfolio will be managed by BLME, according to a statement from the firms.
“Our partnership with BLME, Europe’s largest Islamic bank, is significant because it is further evidence that Australia is being taken seriously as a viable growth market for Islamic funds management,” Crescent Wealth founder and managing director, Talal Yassine, said.
“The partnership rounds out Crescent Wealth’s Shariah-compliant product suite by adding a fixed income option to our existing Australian and global equities, property and cash offering,” he added.
Nigel Denison, head of wealth management at BLME, said: “Recently we have seen increased demand from international investors for Sukuk because of good credit performance that has proven Sukuk to be resilient to the global economic downturn. The strong performance of our fixed income products has been supported by a buoyant Sukuk market, with 2012 looking to be a record year both in terms of our product performance and for the Sukuk market overall.”
The announcement comes at a time when the market for Shariah-compliant products – they prohibit charging of interest, among other features – has been growing, driven by developments such as oil wealth in the Middle East and the rise of an affluent Muslim middle class in countries such as Indonesia.