Crescent Wealth, the Australian fund management firm, is set to launch the country's first Islamic pension fund in December this year.

The company was established in 2011 and to-date records some $5 million in assets under management and advise. Crescent Wealth is looking to grow the planned fund to between $4 billion and $6 billion over the next five years, mostly through investments in property assets on the East Coast and real estate investment trusts. The fund will also allocate money to local and international equities and cash management products.

"Steady cash flows from property investments are attractive to a lot investors, especially in the shariah space. We see significant, pent-up demand," said Talal Yassine, managing director of Crescent Wealth. 

The fund will purchase properties outright as shariah law forbids it from utilising bank debt. More than 95 per cent of the tenants in buildings owned by the fund cannot be engaged in financial services or businesses related to tobacco or alcohol.

Australia has about 470,000 Muslim residents. The fund will initially target domestic investors but will gradually be offered to international parties, even to conservative non-Muslim investors. 

Islamic finance proved itself resilient at the height of the 2008 global financial crisis because its guiding principles prohibit it from getting involved with interest rates. According to Ernst & Young, the sector will likely grow to as much as $1.1 trillion globally in 2012.