Could you provide a brief journey of how you arrived where you are today?
I have more than 20 years experience in the business world, with the past 15 years in the financial services industry in both the US and the Middle East. My interest in Islamic finance was sparked when I worked as a senior investment officer at the Islamic Development Bank (IDB) as well as the Islamic Corporation for Development of the Private Sector (ICD) in Jeddah, Saudi Arabia.
During my tenure, I was responsible for analyzing various investment projects and proposals both for equity and term financing. Prior to IDB/ICD, I was a technology research analyst at Credit Agricole Indosuez Securities in San Francisco.
Upon my return to the US, I founded Florentez Investment Management (ShariahShares ETF) in 2006.
What does your role involve?
My role involves putting together a strategy for the firm, negotiating with service providers and distributors, as well as creating and developing Shariah compliant product offerings that would have the greatest demand in the market.
What is your greatest achievement to date?
My biggest achievement has been in creating a family of Shariah compliant exchange traded funds (ETFs). This was a very research intensive exercise and required a lot of hard work, especially in structuring the format and developing the products.
Therefore, in order to achieve this, it was essential to put together a good team with extensive knowledge and experience.
Which of your products/services deliver the best results?
Shariah ETFs, like all ETFs, bring three sets of features: transparency, all-day trading availability and comparatively low costs. The average annual expense ratio of Shariah ETFs in the US is about 50 to 60 basis points whereas that for mutual funds is one to two percent per annum.
So the investors end up saving quite a bit of money. These three features make Shariah ETFs a superior product when compared to mutual funds.
What are the strengths of your business?
The Shariah compliant financial services market in the US is underserved due to lack of supply of quality and cost-effective investment management products and services. We hope to fill this market gap by offering innovative Shariah compliant products and structures.
What are the factors contributing to the success of your company?
A lot of hard work and dedication, while maintaining integrity. Plus the ability to create and innovate products and services that are tailored to meet the needs of investors..
What are the obstacles faced in running your business today?
As an ETF sponsor, the biggest challenge we’ve faced is in the approval process of the U.S. Securities and Exchange Commission (SEC). Also, Islamic finance has yet to break ground in a big way in the US. Most large companies are not keen on pursuing faith-based investing, be it Christian or Islamic.
However, this gives smaller players like us an opportunity to penetrate the market. In a way we have, so to say, turned this obstacle into an opportunity.
Where do you see the Islamic finance industry in, say, the next five years or so?
I foresee the industry experiencing continued growth, and maturing with a greater depth of Shariah compliant products available in market. I also hope that the future brings standardization of Shariah across the different regions.
One of the biggest challenges that the Islamic finance industry faces is the discrepancies between the various Mazhab (schools of thought). These are the hurdles that eventually have to be worked out so as to facilitate the growth of the Islamic finance industry globally.
Name one thing you would like to see change in the world of Islamic finance.
More education for the investors. Education is the key to the success of Islamic finance.