Islamic Banking

UK Investment House Bridges A Gap With Shariah Venture Capital Fund

Tariq Sami, 31 October 2008


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.  

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