Saudi Arabian wealth management giant NCB Capital is initiating an intensive 12-month campaign of Shari'ah compliant funds launches as it seeks to tap runaway growth in demand for mutual funds and private wealth management.
In plans seen by The Islamic Globe, four Islamic funds will be rolled out over the coming year that will invest in Saudi real estate, equities and small- to medium-sized businesses (SMEs).
The Riyadh-based bank is also in the final stages of a tie-up with an international asset manager to expand its global equity offering.
Jawdat al-Halabi, CEO of NCB Capital, said local demand had spiked for discretionary funds targeting higher rates of return than the firm's existing products. He also said that investors' risk appetite has increased.
Al-Halabi told The Islamic Globe that: "Our general Saudi trading fund has performed well, but clients are now directing their attention at specific sectors.
"Since the start of 2011, clients have looked for value and growth and better returns than they've seen in the past. Whereas post-crisis they were sitting on the sidelines, they are now becoming more demanding," he said.
Al-Halabi said he was now avoiding "tricky" markets affected by political unrest and had been forced to shelve a number of private equity investments in Egypt.
NCB Capital is the largest wealth manager in the Middle East, with $14.9bn in assets under management. It dominates regional Islamic finance due to Saudi's abundance of super-rich Shari'ah investors.
High-net worth individuals in the country have been eagerly awaiting the government's public spending package, which is likely to stimulate widespread economic activity.
Major investment has been earmarked to boost the real estate sector, one of the fastest growing in the region.
It also introduced measures to help small businesses obtain Islamic finance to expand their activities in a bid to reach its target of 10,000 SMEs in the next 10 years.
Al-Halabi said NCB Capital's planned SME fund will be structured as an Islamic private equity product, targeting wealthy family offices.
Given the firm's influence in the Saudi market, its ambitious expansion is likely to turn heads in competing jurisdictions around the world. Islamic finance hubs in Asia, including Malaysia and Singapore, have long been wary of the Middle East's enormous growth potential on the international stage.
Saudi Arabia has over $92bn in Shari'ah financial assets and is the largest Islamic banking player in the world in terms of fund volume.
In 2007, NCB Capital launched the first Shari'ah compliant real estate fund, Al Ahli Saudi Riyal Trade Fund. It is still the largest fund of its type in the world.
The firm offers conventional banking services, but 95% of its asset management business is in Islamic products.
© The Islamic Globe 2011
