‘Sell in May and go away’ – the adage that typically spooks Wall Street this time of year was nowhere in sight in 2025 as major stock indices flashed green and the S&P 500 had its best performance in 18 months amid US tariff rollbacks and relatively calmer geopolitics.
The Islamic fund universe had an equally momentous month as the race for investors’ money heated up in the space amid innovation that brought diamonds into the Islamic assets universe, Indonesia’s first Shariah-funded film and a historic Saudi ‘callable equity’ fund.
Offerings
A Fatwa by Islamic finance stalwart Sheikh Dr Mohamed Ali Elgari has declared diamonds to be a new Shariah compliant asset class, acting as a precious commodity that could be pivotal to overcome a key challenge of asset-backed transactions. The pioneering development, announced on the 29th May 2025, named the Dubai Multi Commodities Centre as the venue to provide audited, tax-free custody of diamonds for the benefit of Islamic banks and investors worldwide.
On the broader GCC front, family offices in the Gulf are redefining strategies by adding innovation-driven sectors like health-tech and AI within a VC approach. Also in the GCC, tech-focused Saudi VC firm STV is establishing a new Shariah asset class with a US$100 million ‘callable equity’ fund that will provide seed money to start-ups, in return for stakes in the companies that the owners can buy back later.
In Indonesia, local studio Warna Pictures is preparing for the theatrical release of ‘The Sun Gazer: Cinta Dari Langit’, a family-friendly movie with Muslim religious values fully funded by the Group of Koperasi Syariah Benteng Mikro Indonesia (Kopsyah BMI). Australian Halal finance specialist Hejaz is priming up five UCITS – undertakings for collective investment in transferable securities – to debut on the Irish and London exchanges, significantly expanding its European footprint and brand presence.
The Premia BOCHK Saudi Arabia Government Sukuk ETF made its debut on the Hong Kong Stock Exchange. This ETF provides investors with direct, physically replicated access to government Sukuk, tracking the iBoxx Tadawul Government & Agencies Sukuk Index (SAR Unhedged) TRI. After over 200 venture debt deals, US-based Atel Capital customized a Shariah version of a venture debt product for Islamic investors in Asia.
In Egypt, electronic payments giant Fawry is diversifying its portfolio by launching three new investment funds that will focus on gold, Egyptian stock exchange ETFs and Shariah compliant equities.
APEX Capital Group introduced the Silk Road Properties Income Fund, a US$10 million Shariah compliant private real estate fund focused on Southern New Jersey targeting qualified investors.
Spanish-Mexican private banking institution Maus Coex Capital, which has finalized a US$100 million Shariah compliant REIT, expanded REIT fund offerings for international investors and asset managers that feature capital preservation strategies in both developed and emerging economies.
UK-based ethical property investment platform, Rise Capital, launched two Shariah compliant property investment structures, onboarding new investors such as pension trustees, sophisticated investors and high-net-worth individuals for upcoming development tranches in East Anglia.
SAB Invest, a wholly-owned investment arm of Saudi Awwal Bank, launched an ETF constructed upon a quantitative investment methodology adapted from an HSBC model.
Arta Finance, an investment platform with a global presence, launched its inaugural Shariah compliant investment portfolios, structured as ‘satellite strategies’ – carefully curated stock baskets centered around specific investment themes.
Asia Vision Capital launched a Shariah compliant real estate fund focused on the activities of the Quayside JBCC project, which will be tied to the broader Johor-Singapore Special Economic Zone.
Deals
Jeddah-based Sidra Capital intends to broaden its Islamic finance activities within the Asia Pacific region, focusing on bespoke lending and prospective property acquisitions while growing its private financing ventures which have already secured the first deal in Australia.
Hassana Investment Company and Franklin Templeton formalized an MoU valued at US$150 million to explore private credit opportunities within Saudi Arabia.
Amwal Capital Partners, an autonomous alternative investment firm with operational hubs in Dubai and Riyadh, raised an initial capital of US$150 million for its ACP Shariah Financing Fund, which aims to execute 12 to 15 direct lending transactions over a five-year horizon with SMEs across the Gulf.
Gulf International Bank and Stanhope Capital Group are tying up to deliver wealth advisory services to institutional and qualified private clients across the GCC.
Arcapita Group Holdings, a Shariah compliant alternative investments firm, acquired a majority stake in Trustpoint.One, a US-based provider of tech-enabled legal services to gain exposure to the recession-resilient US legal services market estimated to be over US$400 billion.
Lesha Bank has announced that its wholly-owned subsidiary in Saudi Arabia, Lesha Capital, has received in-principle approval from the Saudi Capital Market Authority to operate in the Kingdom. Lesha Capital’s business activities will include managing investments, operating funds and providing advisory services.
In Malaysia, the public sector pension fund, Kumpulan Wang Persaraan (KWAP), is reportedly nearing a significant investment of US$12-15 million in Fasset – an Islamic digital asset platform based in the UAE to foray into blockchain and tokenization.
In Nigeria, the Al-Habibiyyah Islamic Society is initiating the use of Waqf, an Islamic endowment, to address community development and poverty reduction. The Al-Habibiyyah Waqf Foundation is part of the society’s broader developmental efforts in collaboration with the McArthur Foundation.
UAE’s first Islamic digital bank, ruya, will roll out new Shariah financing and investment instruments as part of its growth strategy for 2025. The bank’s investment pipeline includes Halal stocks, ETFs and private assets.
Elsewhere in the Islamic investment world, India made rare news as Green Portfolio in Gurgaon, Haryana, announced the expansion of non-traditional equity strategies and the launch of an alternative investment fund.
Islamic fintech
US-based Zoya has created software to extend support to over 1,000 global indices that will allow its users to create a custom basket tracking Shariah compliant subsets accessible through one click — like an index fund.
Gatehouse Bank partnered with fintech Algbra Labs to offer new digital accounts for overseas residents looking to invest in UK property.
Crowdfunding fintech Stake has introduced its inaugural fix and lease Shariah compliant property fund in Riyadh, focusing on a residential tower in the Al Olaya business district.
UAE’s SME-financing fintech firm Gainz successfully closed a significant seven-figure pre-seed investment round. The funding, a blend of equity and debt, was led by key investors including Antler MENAP, Lithium Holdings and Eleventh Invest.
In another tech-infused Shariah development, UAE digital gold investment platform O Gold partnered with Mawarid Finance, a financial institution in the Emirates, to develop and launch the region’s first Islamic gold-backed prepaid card.
Asset growth
Islamic commodity funds shone from the gold they held this year as the precious metal’s rally drove up the AuM across all major regions in Q1 2025. Asia Pacific led the surge, notably in Malaysia and Pakistan, on the back of gold’s appeal as a safe-haven asset amid macroeconomic uncertainties.
Shariah-friendly real estate investment trusts extended their hot run from April, with Dubai Residential REIT announcing an IPO of 1.62 billion units which could become the GCC’s largest listed REIT with substantial gross asset value.
Fractional property investment platform, Shojin, structured and funded its first Shariah compliant real estate investment for a mezzanine funding package for a 250-unit residential development in Greater Manchester, UK.
In the UAE, the Sharjah Real Estate Registration Department is implementing a direct digital connection that will enable Emirates Islamic bank to execute inquiries, verifications and adherence procedures – to bolster the effectiveness of property registration and funding processes within the Emirate of Sharjah.
Regulations
The Saudi Capital Market Authority (CMA) was at the front and center of Shariah regulation news in May.
The CMA gave its stamp of approval for the public offerings of two new funds: the Alinma Free-Style Equity Fund and the Alistithmar Capital Parallel Market Companies Fund (Nomu).
The Saudi regulator also issued licenses to Badwa Capital and Hamah Capital, allowing them to conduct securities business activities and manage investments, respectively.
CMA proposed new offshore securities business licenses for local and foreign entities with regional headquarters in the Kingdom, allowing them to manage funds and conduct securities activities abroad. Additionally, the CMA approved and implemented comprehensive Guidelines for Issuing Green, Social, Sustainable and Sustainability-Linked Debt Instruments.
HSBC and Maybank Islamic units faced fines from Bank Negara Malaysia in March 2025 for regulatory offenses. Maybank Islamic was penalized for errors in credit assessments, while HSBC Bank Malaysia and HSBC Amanah Malaysia were fined for failings in anti-terrorism, money laundering prevention and sanctions screening, despite no actual breaches being found.
