EDC launching five-nation Shariah fund

EDC Fund Management is mobilizing plans for a Shariah compliant fund offering that will span the five key African markets of Nigeria, Ghana, Senegal, the Ivory Coast and Kenya, Multi-Asset Portfolio Manager Olanrewaju Abimbola told IFN Investor.

“We are still working with the regulators in the different countries. The goal is to have a multi-jurisdictional product ready to be rolled out, and not to wait until all the approvals are in.” The target is to have the fund operational in at least one country by the year-end.

As the asset management subsidiary of Ecobank Capital Group, EDC’s new fund mimics its existing Pan-African Fixed Income and Equity Products Africa 8 fund – which invests in fixed income, equity and currency markets of eight countries identified as Africa Economic Transformation drivers.

EDC is capitalizing on the parent group’s regional presence in 35 African countries (excluding North Africa) and its global footprint covering Paris, London, Dubai and Beijing to provide ethical exposure to Africa’s real economy for both regional and international investors.

“EDC will zero in on sectors like agriculture, oil and gas, commodities as well as Sukuk and fixed income. We want to create a structure that gives people globally an opportunity to participate in Africa’s growth,” said Olanrewaju. 

The firm launched in August 2022 the Nigeria Halal Fund, an open-ended mutual fund designed for retail and institutional investors seeking ethical, Shariah compliant investments in Nigeria’s domestic market. That launch laid the foundation for EDC’s regional ambitions in Islamic finance.

Aiming to increase the share of Halal products in its overall portfolio, EDC is looking to have Shariah compliant investments represent 15% to 20% of its total AuM in the medium-term, backed by rising investor interest and favorable demographics in its core markets.

“The idea is to have a product that enables people to invest across Africa in a Halal way. We know there is demand, and we are building the platform to meet this need.”

Acknowledging past issues which deterred foreign investors, Olanrewaju said Nigeria is now a more attractive option as the currency exchange rate has somewhat stabilized and remittance hurdles have been largely sorted to allow investors to easily send in and take out money.