Islamic Banking

UK Investment House Bridges A Gap With Shariah Venture Capital Fund

Tariq Sami, 31 October 2008

articleimage

In a move that could be attractive to wealth managers, London based Pre-X Capital Management announced its imminent launch of a new Shariah compliant fund, the Bridge Fund, at the Islamic Trade & Finance Conference 2008.

With assets under management valued at £9 million, the venture capitalist firm employs 12 staff.

For Pre-X, the decision to expand to Shariah based solutions was relatively straightforward. The founder of Pre-X, John Blowers, told WealthBriefing that there was “very little difference” between Shariah compliant funds and other socially responsible funds. A panel of Islamic scholars would work alongside fund managers and advise against non-Islamic investments such as tobacco and alcohol.

The development of Islamic finances continues to attract considerable interest from the conventional investment sector. Though relatively new, Pre-X has a history of servicing venture capitalism’s orthodox base.

Mr Blowers criticized what he sees as the nervousness of the market with regard to up-and-coming corporations. Speaking of the equity gap, he said: "[It’s] not a gap now… it’s an abyss.” It was here where Shariah compliant funds could step in. Structured to favour equity participation, they could provide the working liquidity needed for growth.  

Pre-X holds investments for its 600 private clients ranging from £50,000 up to £250,000. Though the details of its Bridge Fund have not yet been settled, the company is aiming to raise £50 million for a conventional sister fund, The X Fund.  The Bridge Fund offers wealth managers an opportunity to take a limited risk and see whether the structures of Islamic products are valuable to the wider market.  

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes