Marco Mauri is an experienced asset manager covering various asset classes with particular focus on frontier and emerging markets. He worked in European Asset Managers including Primegest and Generali Investments before moving to the Middle East. He is a Certified Alternative Investment Analyst (CAIA) and CFA Institute member. He obtained his Islamic Finance Qualification from the IFQ Institute, London.
Could you provide a brief journey of how you arrived where you are today?
I have almost 15 years experience in asset management with the last five years spent in the Shariah compliant investments industry. I initially approached Islamic finance from an academic angle. When I was in Europe, in parallel to my professional activity, I was assistant professor at the university for the courses of International Monetary Economics and Microeconomics and I decided to bring to the attention of the faculty the subject of the Islamic finance in order to develop research activities (research papers, seminars) that ended up also with the publication of the first reference book on Islamic finance in Italy. Subsequently, the move to the Middle East has been an opportunity to combine my professional experience in asset management and the interest in Islamic finance.
What does your role involve?
Within the asset management team I’m responsible for Sukuk investments, international equities, multi asset classes’ strategies and overlooking the clients’ portfolio asset allocation. I’m responsible for the business development of our asset allocation-advisory service.
What is your greatest achievement to date?
Focusing only on the years of experience in the Islamic finance, I would say that the financial crisis has provided ground for challenging ourselves. During 2009 and 2010 we received from clients many requests of asset monetization and we worked on innovative structures to extract cash from those assets (Sukuk, equities and real estate). It has been a fascinating and intensive effort between client requirements, Shariah requirements and structuring requirements. We achieved important results. That experience gave us also the opportunity to develop a platform of solutions, enhancing our service offering.
Which of your products/services deliver the best results?
The offering of Sukuk enhanced portfolio solutions has provided a way to attract client interest and a peculiar approach to develop an Islamic asset allocation, allowing Shariah compliant investors to gain confidence with Sukuk (for many of them an unknown asset class), receive stable income stream, obtain leverage and implement diversification in other asset classes. Sometimes, with more sophisticated investors, we have been able to use Shariah compliant derivative solutions providing also downside protection to their portfolios. Transparency and continuous client education are the key success factors for developing trust with our clients.
What are the strengths of your business?
Since the beginning we have been convinced that Islamic asset management will evolve from funds to more tailor-made wealth management solutions. Even if we are launching few flagship funds, we spend more effort in developing an open architecture platform of Islamic investment solutions under the brand of alkhair innovate®. We want to offer the best product-solutions available into the market focusing on the asset allocation that for us is still the missing action in Islamic finance.
What are the factors contributing to the success of your company?
Asset management, in particular for a small boutique, is a talent driven business. In our team we have a combination of local and international experience that has been able so far to provide cutting edge wealth management solutions to our client base.
What are the obstacles faced in running your business today?
In the asset management business the economy of scale is the key success factor. Being a new comer into the market requires more efforts in gaining client trust and developing a fruitful relationship. Shareholder support is essential to move the first steps and developing a distribution platform is needed to move to the next level.
Where do you see the Islamic finance industry in the next five years?
There is no doubt that Islamic finance has experienced extraordinary growth in the last decade. Even if with marginal impact, the recent financial crises highlighted some weaknesses, especially on the Islamic investment banking side: concentration in illiquid assets, lack of diversification and a propensity towards accounting earnings instead of cash earnings generating business model. During the euphoria of the early 2000s, Islamic finance was utilized sometimes more as a marketing tool instead of a ‘new’ financial proposition. The crisis helped to put things in the right perspective and few changes occurred. We see the Islamic retail banking gaining market share in the emerging-frontier markets, the Sukuk market developing substantially and Islamic assets being managed by professionals with more attention to developing a proper asset allocation framework.
Name one thing you would like to see change in the world of Islamic finance.
We would like to see more development in the secondary market of Sukuk, in particular among domestic issuances and regulators can play a role to set up proper infrastructure. We would like to see more institutional investors playing a role within Islamic finance: asset managers, endowments, pension schemes, Takaful, Wafq. We believe that more consolidation is required because economy of scale is a key element. If you think that the Islamic funds industry amounts to US$60 billion and the largest Islamic asset manager has assets under management of around US$15 billion there is huge potential but also a long way to go.