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Saudi-Swiss fund investing in soft commodity markets

06 December 2012
JEDDAH - Sidra Capital (Sidra), a Saudi Arabia Capital Market Authority (CMA)-regulated Shariah- compliant financial services company and INOKS Capital SA (INOKS), an alternative investment house specialized in commodities financing in emerging markets and regulated by the Swiss Financial Market Supervisory Authority (FINMA), recently announced investments in various transactions by its jointly managed Sidra Ancile Global Structured Trade Finance Fund (STFIF) totaling $13.5 million.

STFIF, which was regulated under both the CMA and the Commission de Surveillance du Secteur Financier (CSSF) of Luxembourg, closed its first offering of subscription in September 2012 and have since approved investments in various transactions for its current assets under management.

A total of $13.0 million was already invested in a couple of syndicated transactions, among others, to finance the production of seed cotton and cotton lint for the export market which originated from Burkina Faso and Ghana via the Islamic structure istis'na.

In both transactions, Sidra acted as the investment and Shari'ah Adviser, while INOKS was the Investment manager.

The other transactions were importation of poultry into GCC from Brazil and global trading of rice and coal.

The investments in both transactions were also made Islamically, namely murabaha or mudaraba or a combination of both structures.

Hani Othman Baothman, MD & CEO of Sidra, said "this fund is unique in every sense and is the first to be offered in the KSA. It targets to invest in the investment space, which was left underserved by larger mainstream banks for various reasons including recapitalization exercise and higher capital charge for such transaction under the BASEL III requirements. We saw the opportunity and we capitalized on it through this fund, which is managed jointly by our partner, INOKS. We look to gradually increase our asset under management in the coming years."

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© The Saudi Gazette 2012

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