Jul 03 2011

BLME launches High Yield Fund

By Bree Freeman The Bank of London and The Middle East ( BLME ), a UK-based wholesale bank, has launched its High Yield Fund.

The fund, which will target institutional and high net worth investors in the GCC, is seeking to generate higher returns than those targeted by the company's US Dollar Income Fund.

"The launch has been the natural progression of BLME 's Asset Management business developing from the success of our US Dollar Income Fund," said Nigel Denison (pictured), executive director & head of markets, at BLME , in an interview with The Islamic Globe.

"The BLME High Yield Fund responds to the demand we have seen from institutional and high net worth investors for a fund with a higher risk/return profile. This is the second new compartment to be launched under BLME 's Shari'ah Umbrella Fund this year and highlights BLME 's continued commitment to developing competitive Shari'ah compliant funds across a range of asset classes. We believe that asset management will not only be central to our continued development but also to the future growth of the Islamic finance industry."

With the Sukuk market having become more liquid, diversified and enjoying a strong rally despite the ongoing unrest in Yemen, Libya and Syria, BLME is hoping that this rally will provide the Sicav/SIF open-ended fund with the opportunity for strong returns.

"There have been a number of reports released over the last month forecasting a increase in Sukuk issuance from 2010. We are also looking to diversify our investments and have structured this fund in such a way so we can invest in Ijarah and trade receivables," said Denison.

BLME is targeting a net return of three-month US Dollar Libor plus 5% p.a. by investing up to 85% in Sukuk and 15% in Ijarah. The fund has seed capital of $10m. Minimum investment is US$250,000 with Sterling and Euro share classes also available. Annual management charge is 1% with no initial fee.

© The Islamic Globe 2011

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