Saudi’s Sedco Capital Launches First In-House Managed Islamic Fund

The Gulf equities fund, domiciled in Luxembourg, has an intial $30 million in assets.

Jeddah-based Islamic investment firm Sedco Capital has launched the first fund managed by its own in-house team, looking to bulk up its asset management capabilities, the firm said on Monday.

The Gulf equities fund, domiciled in Luxembourg, has an intial $30 million in assets and is Sedco’s 14th fund overall. It is part of Sedco’s strategy to source two-thirds of its assets under management from outside Saudi Arabia in four to five years.

“With more and more people looking at MENA and with interest in sharia investment growing all the time, we expect this fund’s value to reach $100 million in the short term,” said Yazan Abdeen, lead fund manager at Sedco.

Previously, Sedco relied on external advisors for its funds. Last year, it launched an Islamic fixed income fund with an initial $100 million alongside an Islamic global equity fund with $150 million, both using Credit Suisse as investment manager.

Sedco Capital, a fully owned subsidiary of Sedco Holding, said it had also signed the United Nations’ Principles for Responsible Investment (UN PRI), becoming the first Gulf-based Islamic asset manager to do so.

Islamic funds follow religious principles such as bans on alcohol and gambling, similar to filters used by funds based on environmental, social and governance (ESG) principles, but the industry has only recently begun to stress themes of wider social responsibility, such as protecting the environment.

Islamic fund managers such as Sedco are seeking a crossover opportunity between ethical and sharia-compliant investing, to widen their appeal to both sets of investors.

Sedco Capital, which manages and advises $3.6 billion of assets, last year incorporated ESG principles into two of its equity funds. This allowed the funds to be marketed to investors beyond the traditional Islamic finance centres in the Middle East and southeast Asia.

There are 1,285 signatories to the UN PRI, most of them based in the United States and Europe, with London-based Arabesque the only other Islamic asset manager on the list.