A conference of Hedge Funds World Middle East next month will highlight Shariah-compliant initiatives and instruments offered by leading regional and global institutions. 

Regional high net worth individuals and institutional investors, who are seeking safer ways to invest their capital, may find Islamic finance an attractive option, say some experts, who are convening in Dubai to discuss innovations in the hedge fund industry.

Islamic hedge funds, unlike their conventional counterparts, are fully transparent and allow access to Shariah scholars who monitor them to ensure they comply with Shariah law, said a statement.

The conference, which is organized by Terrapinn, will present a large number of hedge funds, local investors and international pension funds and endowments.

“Many delegates now see this event as their preferred hedge fund event globally - attracting the most investors, the biggest names and in the best location,” said Symon Rubens, managing director of Terrapinn in the Middle East. “This year, more than twenty end-investors, both international and local, are featured on the speaking program.”

The conference will bring together a host of high profile speakers and participants from the US, UK, Kuwait, UAE, Qatar, Saudi Arabia and Switzerland to discuss opportunities in the hedge fund sector.

Ahmed Bin Sulayem, executive chairman of Dubai Multi-Commodities Centre Authority (DMCCA,) will deliver a keynote address at the event, highlighting the efforts of DMCCA and Shariah Capital, a US company to introduce Islamic hedge funds to the market.

Ahmed Bin Sulayem commented: “There definitely is market appetite for Islamic hedge funds.  However, very few players are able to provide high-quality Shariah compliant managers and strategies that can deliver absolute returns to institutional investors and family offices. Some of these investors are already exposed to conventional hedge funds but may have a preference for funds that are Shariah compliant.”

It is reported that the appetite of institutional investors for innovative, specialized hedge funds remained intact as 2008 drew to a close. In a study conducted in November 2008 by SEI and Greenwich Associates, about 85 per cent of institutions surveyed said they planned to maintain or increase their allocations to hedge funds, with only a quarter saying they had liquidated some investments or planned to do so.

At the same time, the Islamic Finance industry has grown steadily at 15% a year. In a matter of years, it is expected to reach $1 trillion, despite the global economic recession and regional slowdown. According to the Dubai International Financial Centre, current market penetration of Islamic products amounts to an estimated 20% of the Arab population.  This figure is expected to rise dramatically. It is expected that within the next decade, 50-60 per cent of the total savings of the world’s 1.2 billion Muslims will be in the form of Shariah compliant products.

“The platform of Shariah-compliant hedge funds available to investors today is excellent,” said Eric Meyer, a pioneer in Islamic finance who is a featured speaker at the event. “The liquidity-rich Gulf and Middle East regions are still looking for investment opportunities that reconcile modern investment strategies with Shariah Law. Now they have a solution -- either the individual DSAM Kauthar funds or their composite fund-of-funds, the DSAM Kauthar Commodity Fund.” – TradeArabia News Service