Bahrain-based Islamic investment house Tharawat plans to launch in the third quarter a $50-$60 million private equity fund investing in a Saudi Arabia real estate project, its director said.

A strategic investor has pledged $30 million to the fund which will invest in an industrial estate in Riyadh, Abdulaziz Saad Al-Resais, director for investment, told Reuters on the sidelines of an Islamic banking conference in Singapore.

Tharawat is also looking to set up by the end of this year 2-3 more funds investing in Saudi Arabia's property market, which Al-Resais said was least affected by the housing glut and the financial crisis in the Middle East.

'The high-end market may suffer from the crisis, but there is a short supply in the low and mid-level housing market,' he said.

Al-Resais said the Dubai and the euro zone debt crises had hurt its plan to raise $100 million in 2009 for its sukuk fund. The fund had raised between $10 and20 million so far due to the global market volatility, he said.   

'What we are experiencing is price volatility because of concern in the fixed income market in general, not particularly sukuk,' Al-Resais said.

'What we hope to see in the future is more information disseminated so investors will be able to differentiate between sukuk and conventional bonds.'    

Tharawat was established in July 2008 with a paid-up capital of $33 million. - Reuters