Islamic Finance
news (IFN), the world’s global Islamic finance news provider has announced the winners of its second Islamic Investor Poll with a mixed bag of notable yet familiar names taking the plaudits along with some first time winners.
Launched in 2011, the IFN Islamic Investor Poll focuses on the rapidly developing global Islamic funds industry. With over 700 Shariah compliant funds and a combined value in excess of US$50 billion in assets, investors have been drawn to the Islamic fund industry regardless of their faith. IFN, which prides itself on being the only comprehensive and unbiased guide to the leading asset management companies within the Islamic finance industry, believes that Islamic asset management companies should be recognized for their innovation and expertise.
Categories contested in this years’ poll include: Best Investor Relations by an Asset Management Company, Best Islamic Investment Strategist of the Year, Most Innovative Asset Management Company, Best Institutional Solutions Provider, Best Fund Domicile of Choice, Best Institutional Investor and Best Fund Distributor.
Malaysia’s CIMB-Principal Islamic Asset Management took the helm once again winning three awards for 2012 — the Best Overall Islamic Asset Management Company, Best Institutional Solutions Provider of the Year as well as the Best Islamic Asset Management Company in Asia. Oasis Crescent Asset Management won the Best Islamic Asset management Company in Africa; Azzad Asset Management came top for the America’s; NCB Capital received the accolade for the Best Asset Management Company in the Middle East; and BNP Paribas Investment Partners were named the Best Asset Managers in Europe for the second consecutive year.
Singapore’s Sabana Real Estate Investment Management clinched the awards for the Best Investor Relations by an Asset Management Company in addition to being recognized as the Most Innovative Asset Management Company. The Best Islamic Investment Strategist of the Year went to Abu Dhabi Islamic Bank.
In the category of Fund Domicile of choice, voters were unanimous in their selection picking Malaysia over other major international onshore and offshore centers. Recognizing that the Islamic investor was fundamental to the asset management industry, IFN also invited asset management companies to vote for the choice investors and distributors that form an integral part of the fund industry. The Best Institutional Investor was awarded to Malaysia’s Employees Provident Fund while Bank of Tokyo-Mitsubishi UFJ was declared the Best Fund Distributor for private and/or retail banks.
Methodology:
A month-long polling period during June and July saw a 450% increase in the number of votes received over the 2011 poll with a total of 1,196 unique votes. Following a stringent due diligence process, 198 votes were discarded due to irregularities.
Surveys were sent to institutional investors, money managers, private bankers, investment analysts, treasurers and other recognized investors. They in turn provided information on a number of criteria pertaining to the Islamic fund industry and also on their selection for the categories listed.
Best Overall Islamic Asset Management Provider of the Year / Best Islamic Asset Management Company in Asia
CIMB-Principal Islamic Asset Management
CIMB-Principal Islamic Asset Management (CIMB-Principal Islamic) has once again not only clinched the most coveted award the Best Overall Asset Management Company in this year’s polls but has also won the highest number of awards: taking the Best Islamic Asset Management Company in Asia as well as the award for the Best Institutional Solutions Provider of the Year.
The firm is headed by Noripah Kamso, CEO, who since 2008 has successfully established a platform for the firm to have a global reach. The firm has seen consistent performance since its establishment, with its investment strategies deeply rooted in Shariah principles. The global asset management company, a joint venture between the CIMB Group and Principal Global Investors, offers the full spectrum of Islamic investment solutions with end-to-end processes to meet institutional global investors’ needs and objectives by offering separately managed portfolios for institutions and collective investments.
Headquartered in Malaysia, CIMB-Principal Islamic capitalizes on its location in one of the most vibrant Islamic markets in the world. The firm, which is also one of the first global Malaysia-based Shariah compliant asset managers, is able to leverage the country’s comprehensive Islamic financial infrastructure and adopt global regulatory, legal and Shariah standards. Noripah is of the view that Shariah compliant investing offers a compelling value proposition to Muslim and non-Muslim investors alike, who value ethical business practices, social responsibility and fiscal conservatism. Testament to this is CIMB-Principal Islamic’s broad client base throughout Asia and Europe. Noripah said: “They are mostly institutional clients from Asia and the Middle East who prefer Shariah compliant investment portfolios, and from Europe who are looking for ethical investments.”
Best Institutional Solutions Provider of the Year
CIMB-Principal Islamic Asset Management
A new award to the staple poll, CIMB-Principal Islamic again received the highest number of votes for this category from IFN readers. The asset management company offers holistic Islamic asset management with end-to-end processes in accordance with Shariah principles; thus making is a natural choice for institutional investors, both Muslim and non-Muslim alike, who are looking for Shariah compliant investment solutions.
Noripah Kamso, CEO of CIMB-Principal Islamic, believes that the firm’s investment strategy has propelled it to become one of the top Islamic global asset managers: “For equity investments, the target benchmark for performance is 2-4% per annum. We offer highly active portfolios that are driven by bottom up stock selections based on integrated qualitative and quantitative fundamental research. Our equity proposition offers flexibility in meeting clients’ requirements. For Sukuk, our disciplined portfolio construction involves both a top-down and bottom-up approach, incorporating securities analysis- including fundamentals, technical and valuations for each security; combined with economic sector and risk analysis. We are also able to achieve persistent structural advantages through the breadth of market coverage, depth of specialized expertise and innovation in evolving markets.”
In January 2012, the asset management company became the investment manager of three Undertakings for Collective Investment in Transferable Securities (UCITS) funds domiciled in Ireland: the Islamic Global Emerging Markets Fund, the Islamic Asia Pacific (Ex-Japan) Fund, and the Islamic ASEAN Equity Fund. It targets a total AUM of over RM200 million (US$64.07 million) by the end of 2012.
According to Noripah, institutional mandates from pension houses, central banks and Takaful companies in the Southeast Asia region are expected to reach US$1 billion by August this year, thus further cementing the asset management company’s foothold in the Islamic finance industry, not only in Asia but globally.
According to Noripah, institutional mandates from pension houses, central banks and Takaful companies in the Southeast Asia region are expected to reach US$1 billion by August this year, thus further cementing the asset management company’s foothold in the Islamic finance industry, not only in Asia but globally.
Most Innovative Asset Management Company
SABANA Real Estate Investment Management
The Singapore-based Sabana REIT has taken two coveted awards despite being a newcomer to the Islamic real estate investment trust sector. The industrial REIT, managed by Sabana Real Estate Investment Management, was listed on the Singapore Exchange on the 26th November 2010. It remains the world’s largest Shariah compliant REIT by total assets. Beating analysts’ forecasts in six straight quarters, the REIT boasts international investors including Fidelity Investment Managers, a global mutual fund manager that entered as a cornerstone investor with a stake of around 4.4% in the REIT. Sabana REIT, which debuted at SG$664.4 million (US$533.06 million)during its initial public offering, currently has a portfolio of 20 quality industrial properties in Singapore valued at more than SG$1 billion (US$802.49 million).
Market players in the Islamic finance industry are often faced with the challenge of the differing Shariah standards that have caused certain investors to shun certain transactions or products. Bobby Tay, the co-founder and chief strategy officer of SABANA Real Estate Investment Management, strongly believes therefore that the key innovation of Sabana REIT lies in its GCC-certified Shariah compliant structure, being the first and only one of its kind. “Having such a structure has allowed the REIT to attract not only the interest of Middle East investors but also offers access to global investors from all religious backgrounds around the world. Sabana REIT’s current non-Shariah income is capped at 5%—the strictest known standard so far. Sabana REIT’s non-Shariah income constitutes only 0.2% of its gross revenue as of their latest quarterly financial results. The debt used by Sabana REIT is also Shariah compliant in nature,” he said.
Best Investor Relations by an Asset Management Company
SABANA Real Estate Investment Management
Having a diverse range of investors in its REIT, it is not surprising that the readers of Islamic Finance
news also selected Sabana REIT as a winner in this category. In a continued effort to attract investors – Islamic or otherwise – Sabana REIT participates in non-deal roadshows as well as conferences globally, to educate Islamic and conventional investors both retail or institutional. Education is key to not only creating awareness of global investors but also allowing them to understand the structure of the product.
Tay is of the view that the success of a product depends on various factors including marketing, branding and even communication. Sabana REIT is backed by an investor relations (IR) team which regularly engages analysts comprising key research houses in the financial industry, as well as fund managers, particularly after the announcement of its quarterly results. “We also have a policy of answering every online enquiry made through ourwebsite within a maximum timeframe of 48 hours. Aside from the website, we ensure that IR contacts are easily accessible by phone or email,” said Tay.
Best Islamic Asset Management Company in the Middle East
NCB Capital
This is the second consecutive year that NCB Capital has clinched the award for Best Islamic Asset Management company in the Middle East. The wealth manager was ranked the world’s largest investment manager of Islamic funds by KFH Research as at the end of 2011. The bank is the first subsidiary of a Saudi bank to be licensed by Saudi Arabia’s Capital Market Authority (CMA), and provides investment banking and asset management services in the retail as well as corporate space in the kingdom.
According to the 2011 Ernst & Young Funds and Investments report, it is estimated that Saudi Arabia has US$19.9 billion in Islamic assets under management (AUM); earning NCB Capital the top spot as Saudi Arabia’s largest investment bank, with more than a million clients and SAR44 billion (US$11.73 billion) in AUM since its establishment in 2007. NCB Capital’s top performing AlAhli Saudi Trading Equity Fund is also the world’s largest Shariah compliant fund with AUM of US$3.48 billion as at the 31st of July 2012 according to Eurekahedge. Although previously quiet on the Islamic asset management and funds front, the GCC is fast becoming a significant player in the global market. Private equity and real estate are currently touted to be the main areas of growth for the Middle East; with increased interest in these sectors amongst investors, improving returns and stability in the GCC real estate industry, and evolving regulations. The rising demand for private equity funds has been spurred by government efforts in the Gulf region to improve the regulatory framework and to liberalize economic policies for privatization, globalization and efficient deployment of capital.
In line with the current trend, NCB Capital successfully raised SR280 million (US$74.66 million) earlier this year for its NCB Capital Real Estate Development fund, which invests in the development of residential villas in the north of Riyadh. Tariq Linjawi, the head of wealth management at NCB Capital, said: “We managed to close subscription in the fund in record time due to investors’ confidence in the solid Saudi economy and supported by the fast growth of the local real estate sector along with huge demand for residential units in the kingdom. In addition, investors’ interest reflects their trust in NCB Capital’s fund management expertise.”
Over the last 12 months, NCB Capital has launched several new funds, expanded its discretionary portfolio management business and consolidated its mutual fund platform, according to the asset management company.
Best Islamic Asset Management Company in Africa
Oasis Crescent Management Company
Conquering the African market is Oasis Crescent Management Company, a second time winner in this category, which currently manages Shariah compliant assets of over US$3.9 billion. Established in South Africa in June 1997, and with asset management as its core business, it currently manages both conventional and Shariah compliant funds which are directly available through its South Africa and Dublin offices.
In its bid to penetrate the European market, Oasis recently launched a new London office, offering Shariah compliant Undertakings for Collective Investment in Transferable Securities (UCITS) funds.
Oasis’ product offering comprises a range of collective investment schemes, global mutual funds, endowment policies, retirement funds, pension annuity policies, pooled fund policies and manages segregated and pooled funds for its retail and institutional clients.
Currently managing over 60 Shariah compliant funds, Oasis is recognized as a global fund management company that specializes in Shariah compliant investment solutions. A year after commencing operations in 1997, Oasis launched its first Islamic fund – the Oasis Crescent Global Equity Fund – which has become one of the company’s largest funds to date with US$149.48 million AUM as at the 30th June 2012. The fund has posted a cumulative return since inception of 115.3% against its benchmark which achieved -9% during the same period. Oasis was also the first asset management company in South Africa to launch a Shariah compliant retirement fund, the Oasis Crescent Retirement Fund, which has a 10-year track record.
Oasis Group has a wide distribution network for its Shariah compliant funds through global platforms such as Citigroup, Goldman Sachs, Malaysia’s AmBank, Dubai-based Emirates Islamic Bank and Abu Dhabi Commercial Bank as well distribution tie-ups with insurance and Takaful companies like Salama and Maybank’s Etiqa.
Adam Ebrahim, CEO of Oasis Group Holdings, said in an interview with Islamic Finance
news that the company has big expansion plans for the future that included the recent launch of its London office as well as six new funds. On the domestic front, Ebrahim predicted future opportunities in the pension fund space with member choice for retirement funds being introduced about 18-24 months ago.
Best Islamic Asset Management Company in the Europe
BNP Paribas Investment Partners
Another returning winner, the asset management arm of the BNP Paribas Group is currently ranked the sixth largest asset manager in Europe as at the 31st March 2012. BNP Paribas Investment Partners (BNPP IP) comprises several specialist companies which it terms as ‘partners’, and which have a distinct investment philosophy and business scope. As at the 30th June, it managed EUR 502 billion (US$620.99 billion) worth of assets, and employed 3,400 staff in 43 countries.
BNPP IP offers a full range of investment management services to institutional clients and distributors worldwide ranging from traditional long-only to alternatives, from judgmental to quantitative, from active to ETFs, and covering a vast array of asset classes. Each is managed by one or more of its 60 dedicated investment centers and with 800 investment professionals.
BNP Paribas Asset Management is the largest partner within the group and manages the majority of the mainstream asset classes operating globally. Several other partners specialize in a particular asset class or field (mainly alternatives and multi-management) and operate as ‘boutique-like’ structures, while several local and regional solution providers cover a specific geographical region and/or client base.
The company is no stranger to the Islamic finance space, having achieved numerous firsts in the industry including launching one of the first Islamic equity fund in the US; the world’s first exchange traded fund on a global market index; as well as the first currency Islamic fund.
Angelia Chin-Sharpe, CEO of BNP Paribas Investment Partners Malaysia, is quoted as saying that BNPP IP’s investment team continues to remain focused as it is steadfast to its investment process and philosophy despite the current challenges in the market; and is committed to delivering a consistent performance to its investors.
BNPP IP was granted its first license in Islamic asset management in 2009 which led to the launch of BNP Paribas Islamic Asset Management Malaysia as its hub to access the investment opportunities and develop its Islamic asset management business in the ASEAN region.
Best Islamic Asset Management Company in the Americas
Azzad Asset Management
A relative newcomer to industry, Azzad Asset Management is a boutique investment advisory firm headquartered in Washington DC and registered with the U.S. Securities and Exchange Commission.
Set up in 1997, Azzad offers a suite of wealth management services that includes financial planning, professional wealth management, ethical and Halal investing with asset allocation and diversification strategies, retirement planning and as well as estate planning and charitable strategies.
Total AUM of the company stand at US$171 million, made up of 800 accounts with the bulk of assets derived from discretionary mandates of US$167 million.
The asset management company has two retail funds in its offering – Azzad Ethical with an AUM of US$22.3 million, and Azzad Wise Capital with an AUM of US$32.9 million – according to data provider Morningstar.
Azzad has also introduced the Ethical Wrap Program which comprises an account with a well-diversified set of portfolios allowing investors to invest in a variety of asset classes, including domestic and international stocks, REITs and commodities.
Best Fund Domicile of Choice
Malaysia
Malaysia was the obvious choice for readers voting in this newly created category, and the country currently houses the most Islamic funds in the world. According to the Securities Commission Malaysia, the country is currently home to 166 Islamic funds totaling RM31 billion (US$9.94 billion) or 11% of the total industry; while its total Islamic assets under management (including collective schemes, private mandates and Islamic wholesale funds) accounted for 14% of the global figure as at the 30th June 2012.
Malaysia has long been an innovator in the Islamic finance industry and is home to the world’s most developed Islamic funds industry. In 2005 it saw the launch of the world’s first Islamic REIT followed by Asia’s first and only Islamic exchange-traded fund (ETF) in 2008.
The country is the only domicile in the Islamic finance industry to offer specialized Islamic fund management licenses, which have attracted the some of the largest mutual funds in the international fund management industry.
To date, 16 fully-fledged Islamic fund management companies are located in Malaysia.
Best Islamic Investment Strategist of the Year
Abu Dhabi Islamic Bank
A new addition to the categories of the poll this year was awarded to Abu Dhabi Islamic Bank (ADIB). Established on the 20th May 1997 and commencing commercial operations a year later, the bank has been at the forefront of the Islamic finance industry ever since. Adhering to its philosophy of providing its investors with “trusted advice by a trusted advisor”, its wealth management division offers tailor-made solutions to meet all financial goals while keeping transparency at the forefront.
Dubbed the ‘TOTAL ADIB’ solution, the division offers a complete range of Shariah compliant investment solutions: including Sukuk, equities, alternative investments, mutual funds, real estate advisory and private equity.
ADIB has managed to increase its assets under management despite the challenging market conditions and an increasing number of regulatory changes. In its second quarterly report, the bank stated that its investments generated from funds in the first half of the year surged to AED199.99 million (US$54.44 million) compared AED174.72 million (US$47.56 million) the year before; while private equity made up AED200.27 million (US$54.52 million), up by AED28.24 million (US$7.68 million) from 2011.
According to ADIB, its focus is currently on deepening customer relationships in its retail banking, private banking and wholesale banking divisions as well as being backed by its strong treasury and transaction banking units has helped it to maintain its position as one of the most liquid banks in the UAE.
Best Institutional Investor
Employees Provident Fund
The success and longevity of a fund largely depends on its investors. In recognition of this, IFN has this year created a new category that allows fund management companies to nominate their favorite institutional investors: including pension funds, mutual funds, money managers, insurance companies, investment banks, commercial trusts and endowment funds.
In its inaugural year, Malaysia’s Employees Provident Fund (EPF) clinched this award. The second largest sovereign pension fund in Asia in 2010, according to Towers Watson, EPF had investment assets totaling RM488.54 billion (US$156.1 billion) as at the 31st March 2011, with a portion allocated into Shariah compliant offerings. EPF’s dedication to the Islamic finance industry was further strengthened when it became the only pension fund in the world to have a dedicated Shariah board to oversee the compliance of Islamic investments.
EPF has also set aside a specific allocation of start-up funds for the 16 foreign Islamic fund management companies that received their licenses from the Securities Commission Malaysia.
Going forward, EPF has pledged to enhance its role as a global player in the promotion of Islamic finance by increasing its investments into several sectors of the industry, particularly an uptake in Sukuk issuances, both domestic and international.
Best Fund Distributor
Bank of Tokyo-Mitsubishi UFJ
Mitsubishi UFJ Financial Group (MUFG) is one of the world’s largest financial institutions with assets totaling JPY218.9 trillion (US$2.76 trillion) as of March 2012. The group comprises five primary operating companies: including Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking Corporation, Mitsubishi UFJ Morgan Stanley Securities, Mitsubishi UFJ NICOS and Mitsubishi UFJ Lease & Finance Company.
MUFG’s services include commercial banking, trust banking, securities, credit cards,consumer finance, asset management, leasing. It has an extensive overseas network comprising offices andsubsidiaries, including Union Bank, in more than 40 countries and 500 offices globally.
Since 2006, MUFG has made investments into and alliances with financial institutions globally. These include Morgan Stanley, CIMB Group, ICICI, Aberdeen, Bank of China as well as Australia’s AMP Capital Holdings. Such strategic alliances have provided the bank via the group with an extensive distribution channel that extends to all important economies and regions.