Islamic Asset Manager Targets RM1bil Fund

It plans three funds tied to sukuk and syariah equities

KUALA LUMPUR: Asian Islamic Investment Management Sdn Bhd (AIIMAN) targets to manage a fund size of US$300mil (RM1.09bil) in its first year of launch.

A 49:51 joint venture global Islamic investment management entity between Hwang-DBS Malaysia Bhd and DBS Asset Management Ltd of Singapore, AIIMAN intends to launch about three funds early next year, focusing on asset classes such as global sukuk and syariah-compliant Asian equities.

DBS Asset Management chief executive officer and AIIMAN director Deborah Ho said the market for Islamic investment products was growing at about 15% to 20% a year on demand for these products coming from the Middle East, Europe and Asia.

“Syariah equity fund assets alone are forecast to jump from US$15bil to US$53bil by 2010,” she said at the launch yesterday.

She added that under the current global economic climate, institutional investors were looking for less risky investments and Islamic investment by nature recognised the importance of avoiding investments in highly leveraged companies and complex derivatives.

AIIMAN is not DBS’s first initiative in global Islamic asset management.

“The first step was when DBS Bank set up the Islamic Bank of Asia (IB Asia) which offers commercial banking, corporate finance and capital market services. AIIMAN would be a valuable provider in our efforts to develop the Asian Islamic banking markets,” Ho said.

AIIMAN chief executive officer Nor Azamin Salleh said the company planned to leverage on the wide Asian networks of DBS Bank as well as IB Asia to gain a foothold in key markets for syariah products, specifically in most major cities in Asia and the Middle East.

Nor Azamin said most Asian countries had large current account surpluses and massive domestic liquidity.

“Asia accounts for more than 50% of the world’s population but controls less than 10% of the global wealth. It is catching up fast with the emergence of vibrant economies such as China and India,” he said.

He added that macro risks in Asia had reduced significantly since the last financial crisis while corporate governance had moved to a higher level across companies and sectors.

“Valuations are relatively cheap - Asian markets are trading at discounts to developed markets, but with vastly improved free cashflows and capital efficiency ratios,” he said.