The Americas stood out as the top performer in Q2 2025, driving renewed momentum in the global Islamic funds industry with total AuM climbing 16.14% quarter-on-quarter from US$16.34 billion at the end of Q1 2025 to US$18.98 billion by the 30th June 2025.
This development was identified using the IFN Investor Fund Database, which is tracking a total of 2,552 public Islamic funds managed by 489 asset management firms around the globe, with a combined AuM of US$533.16 billion.
Diversification of offerings
Combining ethical and sustainable investing principles, the latest Shariah initiative with RHB Bank’s ESG Deposits scheme allows government-linked Malaysia Rail Link to optimize Green Sukuk proceeds by temporarily channeling funds into sustainable socio-economic projects to support broader climate goals – including renewable energy and low-carbon infrastructure projects.
Dubai’s residential property market is seeing a rising trend of interest-free participation, with the shift particularly appealing for off-plan properties where developers offer interest-free payment plans – notably with demand from Asian, Turkish and Middle Eastern investors.
Apex Group sees tokenization as an innovative way of solving structural inefficiencies in Islamic fund distribution, capital formation and investor servicing.
Structuring Shariah compliant private equity investments in AI startups may offer prospects of outsized returns – provided the risk can be mitigated with sufficient capital and resources to ensure proper diversification.
MBS Global Investments partnered with London-based asset manager Enigma Strategy to collaborate on Shariah products, equities and derivatives. This alliance will enable Enigma Strategy to expand into Middle Eastern and Asian markets, focusing on sustainable and green investment solutions.
Saudi Arabia’s Bayt Alnomow Capital launched the Ajras – Bayt Alnomow Capital Direct Financing Fund, a private closed-end fund offering Shariah compliant financing to Saudi SMEs and entities for working capital, expansion projects and debt restructuring.
Almowazi Capital is set to launch iMowazi, Kuwait’s first registered crowdfunding platform, after receiving approval from the Capital Markets Authority. Tajikistan established its first Islamic investment firm aimed at facilitating long-term infrastructure development, with the target being on both retail and institutional investors.
HSBC Malaysia introduced HSBC Premier, offering high-net-worth customers a range of investment solutions. Hong Leong Islamic Bank introduced the HLB Meezani Account-I, a new Shariah compliant investment account for retail investors which offers various rewards – including Umrah packages, travel and discounts.
Market developments
Saudi Arabia’s Capital Market Authority (CMA) is proposing to open to public investors financing investment funds, which were previously offered only via private placements. The proposal aims to consolidate regulations for these funds, which are to be restricted to financing activities, money market transactions and bank deposits to mitigate volatility.
The Financial Services Authority of Oman is introducing a new regulatory framework for the ‘Promising Companies Market’, a secondary market established within the Muscat Stock Exchange – where trading is limited to qualified investors, including licensed securities entities, insurance companies and high-net-worth individuals.
Iran’s Cabinet approved new rial currency notes, set for distribution starting March 2027, which will remove four zeroes from denominations. By March 2030, only these new notes will be recognized, though old notes can still be exchanged at special bank branches.
The number of foreign investors in Iran’s stock markets increased by 5.3% to 5,100 as of July 2025, with their total portfolio value surging 91% year-on-year to over IRR181.8 trillion ($363.6 million). Individual investors account for 3,391 accounts, while corporate foreign investors hold the majority of the portfolio value.
Islamic asset manager Afaq Capital is acquiring Falak’s entire VC portfolio in a deal arranged by former Falak Co-founder Hassan Ikram. The transaction marks the first secondary exit of such an investment portfolio, particularly in emerging markets where liquidity access can be challenging.
Regulatory action
Pakistan’s Securities and Exchange Commission issued a public warning against MAG Ventures, promoted by Syed Mohsin Sultan Shah, for an alleged fraudulent investment scheme. The regulator identified MAG Ventures and related entities as unauthorized, offering unrealistic monthly profits of 5% to 12% from purported meat exports.
Saudi Arabia’s CMA licensed Razeen Financial to commence investment management activity. Established in 2019, Razeen Capital provides Shariah compliant investment advisory and wealth management services to retail and institutional clients.
Kuwait’s CMA granted Boubyan Capital Investment a special marketing license to offer 500,000 shares of Boubyan Leasing and Islamic Finance Fund Company 3 in Kuwaiti dinars.
