Qatar’s Qinvest, QIB In Islamic Funds Tie-Up

Doha-based QInvest and Qatar Islamic Bank have jointly launched a range of multi-manager funds, as the investment firm forges closer ties with its largest shareholder.

The three sharia-compliant funds are part of broader plans to launch as many as 30 funds over the next three years on a managed account platform introduced last year by QInvest, which has around $750 million in capital.

The open-ended “Shiraa” funds will be distributed to private and wholesale clients of QIB, the Gulf state’s largest Islamic lender by assets, which holds a 47.15 percent stake in QInvest.

Multi-manager products are appealing because they can cater to investors whose risk appetite may change over time, Ataf Ahmed, head of asset management at QInvest, told Reuters.

“There are three versions, each offering a different return profile with different levels of risk, which is reflected through the asset allocation.”

The tie-up is part of a streamlining of QInvest operations, focusing on its investment banking and asset management business lines while building stronger ties with QIB.

This could boost the distribution capabilites of QInvest, which also has offices in Riyadh and Istanbul, and help tackle a lack of scale that is common across Islamic fund managers.

The number of Islamic mutual funds globally reached 786 last year, but close to half of them had less than $10 million in assets and only 80 had more than $100 million in assets, a study by Lipper and Thomson Reuters found. Despite such statistics, distribution agreements are rare in the sector.

QInvest says initial response from investors to its plan for the new funds has been positive. “We have a had a high level of interest prior to the formal launch and the intention is not to use seed capital for the Shiraa funds,” Ahmed said.

Islamic fund managers screen their portfolios according to religious guidelines such as bans on tobacco, alcohol and gambling, in much the same way as socially responsible funds.

According to Lipper data, Islamic mutual funds now hold about $46 billion of assets under management, up from $41 billion at the end of 2012, recovering from a low of $36 billion in 2010.