Chicago Global, a Singaporean quantitative investment firm that runs a Shariah compliant Malaysian fund, hopes to raise US$50 million from GCC partners and find ways to penetrate the Indonesian and Thai markets to widen its footprint in global Islamic finance.
With about US$200 million of assets under management, the firm is in talks with pension funds, independent asset managers and private banks in the Gulf area to promote its Shariah strategy, Chicago Global’s Co-Founder Ben Charoenwong told IFN Investor.
“We’re still looking for a key distribution partner in the Middle East. I think if we could raise like US$50 million, that will become our anchor in that area and that would be a good start.”
ASEAN, or the 10-nation Association of Southeast Asian Nations — that includes significant Muslim populations like Indonesia and Thailand, aside from Malaysia — is also “a natural constituent” for Chicago Global’s Shariah strategy, Ben said.
“A big fraction of the southern part of Thailand is Muslim. We’re also trying to see if there are relevant products that we can offer in Indonesia. The challenge with Indonesia is that it has a lot more capital requirements and constraints than Malaysia.”
Another problem with Indonesia is that while it had more than 240 million Muslims — the highest for any country — it represented “a very small fraction of global GDP and the investment opportunity set” Ben said, pointing out that for investors, these could limit the performance and usefulness of adding the country to any portfolio.
Like most fund managers, Chicago Global wished to expand but its investment philosophy was centered on being a player that made a difference — not a participant.
“You can already get Islamic ETFs (exchange-traded funds) or mutual funds for fairly cheap globally. So, what will make us different or special? How can we add more value into a portfolio that would mix between those two?
“We’re not going to clients and say give us all your Islamic equity investment. We’re saying we’ll offer an actively managed (fund with) a slightly different view, which allows more tools at their disposal on how to allocate capital,” explained Ben.
In collaboration with Malaysian investment banking and stockbroking group Kenanga, Chicago Global launched in August 2024 the Kenanga Alternative Series: Islamic Global Responsible Strategies Fund, benchmarked against the MSCI ACWI Islamic Index.
The fund runs on a machine learning-powered system that picks Shariah compliant stocks that are in line with Chicago Global’s other targets.
The system also allows for more frequent and efficient Shariah compliance checks, enabling weekly dossier preparation for advisors, compared to the traditional quarterly reviews. This enhanced efficiency captures a broader investment universe, including nearly 10,000 liquid stocks globally, compared to the more limited scope of traditional Islamic indices, Ben said.
“Our investment opportunity is much richer. We’re not just starting with a pre-approved list. If there’s a good investment we would like to make, the machine helps prepare the report for us to send to the advisor to apply for the checks.”
On the performance front, Chicago Global says its quantitative models are embedded with over 20 alpha, or outperformance, signals that are up 10 times stronger than conventional strategies, while minimizing “market noise” at the same time to cope with sheer market volatility.
It’s a defensive investment approach that Ben and Chicago Global’s other co-founder, Ivan Chelebiev, credit to their alma mater, the University of Chicago — thus explaining the “Chicago” in the name of the Singapore-domiciled firm.
Such an approach is important because while interest in Shariah compliant investments is growing, Ben notes that some institutional investors still prioritize performance over strict adherence to Islamic principles.
Chicago Global tries to appeal to the mindset of these investors with something just as compelling: capital preservation.
“Our strategies tend to be a little underperforming the market when the markets are booming,” Ben said. “But during times of high volatility, turmoil and bad stuff happening around the world, our strategies tend to provide a nice defensive angle.”
Proof of this is how Chicago Global has fared against the worldwide downturn in stocks since February — after the market crash triggered by US President Donald Trump’s pursuance of aggressive tariffs against most of America’s trading partners.
At the close of 11th April 2025, the S&P 500 was down 13% from its February high, after falling more than 20%, or into a bear market, at one point in April. Chicago Global’s flagship equity funds are down by just 1.5% since the end of February, according to the fund manager’s performance trackers.
What’s more, the firm now has “dry powder to increase risks when appropriate”, Ben said. “So far, our investors are slightly less worried than those working with higher risk managers.”
