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Al Hilal Bank has announced that it has launched its first sukuk fund, the Al Hilal Global Sukuk Fund. The new offering reaffirms Al Hilal Bank’s full commitment to product and service innovation and its keen interest in strategic segments of the financial services sector.
The flagship fixed-income fund’s objective is to generate regular income as well as achieve capital appreciation by investing in globally-diversified Shariah-compliant fixed-income securities (sukuk) issued by sovereign, quasi-sovereign and corporate organizations. The structure of the fund is open-ended and the initial offering period will last for one month beginning February 19, 2012. Investors will be able to allot a minimum subscription of USD 10,000 at an initial NAV of USD 10 per unit, representing one of the market’s lowest subscription rates.
Al Hilal Bank will act as the Fund Sponsor while CIMB Principal Islamic Asset Management (CPIAM) will serve as the Investment Advisor for Al Hilal Global Sukuk Fund. CIMB Principal Islamic is a dedicated Islamic global institutional asset management organization with a proven track record of managing fixed-income and equity mandates. As of December 2011, CPIAM had a total AUM of USD 764m while the combined Islamic AUM inclusive of its shareholder group amounted to USD 2.5 billion.
The sukuk fund marks Al Hilal Bank’s second investment fund. The Al Hilal GCC Equity Fund was rolled out in 2010 and currently invests in publicly-trade Shariah-compliant corporate stocks. The latest fund is expected to quickly gain traction given the proven track record of the management and advisory team assembled by Al Hilal Bank, the prevailing volatile global financial environments, and the growing popularity of sukuk securities.
The outlook for the sukuk market is very positive despite the current global macroeconomic uncertainty. Recently-launched sukuk issues were heavily oversubscribed by regional and global investors, reaffirming the appetite for good-quality credit. Furthermore, there is a healthy pipeline of new sukuk as issuers tap debt markets for refinancing needs and take advantage of the current low interest rates.
“We are excited to offer a Shariah-compliant investment opportunity that provides regular income and relatively low-risk exposure.The fund offers an attractive alternative to other investment options with comparable risk profiles. It also raises Al Hilal’s profile as a progressive bank that offers thoughtfully-planned investment solutions,” said Mr. Mohammed Jamil Berro, CEO, Al Hilal Bank.
Explaining the rationale behind a sukuk fund, Lim Say Cheong, Head of Al Hilal’s Investment Banking Group, said that today’s investors prefer low-risk investments that guarantee stable returns and regular income.
Interested parties are advised to contact Al Hilal Bank’s Investment Banking Group, the designated Fund Manager, for further details and any inquiries.
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