The private equity and venture capital (PE & VC) landscapes in the GCC and Southeast Asia have both seen a boom in recent years, Lim Say Cheong, CEO of Saudi Venture Capital Investment Company (SVCIC), tells IFN. NESSREEN TAMANO writes.
Southeast Asian countries with a growing Muslim population, such as Indonesia, Malaysia and Singapore, are very attractive destinations for Islamic PE investments, and similarly, the GCC with its sizeable Muslim population has seen an increase in demand for Shariah compliant investing and opportunities.
“Tech companies are very much in favor in both the GCC and Southeast Asia,” Lim says. “I think in both regions, we will continue to see a rise in tech start-ups, and so this would offer, obviously, significant investment opportunities also for Islamic PE & VC firms. Infrastructure development is also going to be very important, especially in the GCC.”
Other sectors that offer long-term investment opportunities include renewable energy, transportation, logistics, supply chain and Islamic SMEs.
However, Lim opines that PE investors in both regions are overall agnostic. The players in the space go after yield and business model instead.
“Shariah compliant or Islamic investing has always played the little brother to the conventional space, whether in banking or in PE & VC. It’s harder in countries where the infrastructure is not there, the ecosystem is not there, even for conventional, let alone Islamic.”
Lim also cites some challenges in the Islamic space, including the lack of a talent pool and a limited Shariah compliant deal flow.
“Sometimes this is a frustration: we (SVCIC) have the money, we have the liquidity, we have the investors. But we can’t find the right deals, because most of the deals are not, strictly speaking, Shariah compliant. (The lack of) talent and expertise is also a problem, especially in the GCC,” Lim adds.
This is an excerpt of an interview with Lim Say Cheong, CEO of Saudi Venture Capital Investment Company, about the Islamic private equity and venture capital space in the GCC and Southeast Asia. Listen to the full discussion on IFN Podcast.
