Cru Investment to launch $13bn Shariah-compliant agriculture fund |
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The UK-based investment company cru Investment Management will launch a $13-billion (Dh48bn) Shariah-compliant agriculture fund early next year and aims to raise money from the UAE and other Gulf states, a executive said yesterday.
Jon Maguire, Chairman, cru Investment Management, said cru has positioned itself as an entity with focus on social investments and is currently in advance stages of offering an alternative investment instrument combining its ethical and transformational investment focus with Islamic finance.
"I have brought on board an Islamic Finance specialist, Naveen Raza, to head up our Islamic offering. We will be promoting a new Islamic Africa Agriculture fund in the UAE, set for launch in March 2009," Maguire said.
He said asset-backed real Islamic investments offer a better option to investors to safeguard their investments than the conventional equity mode.
Cru, which is targeting the UAE and the regional investors in the GCC to soon offer a Shariah-compliant Fund focused on commercial agriculture in Africa, said that the financial turmoil and the resultant steep fall in the value of conventional market instruments will speed up the pace of the growing affinity towards Islamic finance and real assets globally.
"Investors have been burned by markets in recent times; they are now looking for an asset class uncorrelated with conventional capital markets. We believe food is the new gold. It is emerging as a popular alternative asset class; especially in light of the global population estimates. Figures show 80 per cent of the world's population is set to urbanise by 2030 - if we don't grow food, who will feed these people?" he asked.
The fund, which will invest in commercial agriculture in Sub-Saharan Africa, has dual-purpose - to ensure returns in the range of 15-20 per cent, while the investment helps to create jobs and give rural Africans the chance to help themselves out of poverty.
Currently, Cru has significant exposure to commercial agriculture in Malawi with over 2,500 hectares of land under its own control and another 4,000 hectares in outgrower schemes.
"Our fund comes at a time when current market conditions call for investment into real and tangible assets. One of the best places to put your money is into food production - prices are going up, population is increasing and mouths need to be fed. Africa is emerging as a destination of choice, especially for Middle East investors, as is agriculture. Investors are looking to diversify their portfolios by geography and asset type - Africa is the last frontier," Naveen said.
"We have been marketing this fund in Europe for the last few months and received a positive reaction to it especially from ethical investors. I am excited to see the response from Islamic investors; particularly those that want to stay true to the spirit of Shariah-based investing," she said.
By Staff Writer
© Emirates Business 24/7 2008
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