The race for investors’ money is heating up in the Shariah universe with fund managers’ attempts to bring new products to better serve the Muslim market and keep it on track with the conventional investment world.
Data tracked by the IFN Investor Funds Database last week showed a rise in Islamic pension funds for Q1 2025 that boosted assets under management (AuM) in their hold by a third. Driven by strong growth in Europe and Asia Pacific, the AuM for global Muslim retirement funds surged to US$15.19 billion, up 32.16% from Q4 2024. Pension funds in Pakistan and Turkiye were outliers, raising 78.03% and 37.15%, respectively.
New products, outreach
Tech-focused Saudi venture capital firm STV became the latest poster child for Shariah investment innovation, announcing its own version of ‘callable equity’ – a concept that has been around in conventional investing circles. The US$100 million STV fund – called NICE for its ‘non-dilutive investment in callable equity’ – will offer tech start-ups seed capital in return for stakes in the companies, which their founders can repurchase later.
Australian Halal finance specialist Hejaz is priming up five fund products that are to debut on the Irish and London exchanges. The UCITS – undertakings for collective investment in transferable securities – products are expected to significantly expand Hejaz’s European footprint and brand presence.
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.
Pakistan, meanwhile, unveiled its first Islamic REIT for a hybrid hotel project that marks a collaboration between JS Investments and the Gohar Group of Companies. The pioneering venture features a premium 139-key hotel in Hyderabad that is expected to be a significant milestone for the region’s real estate and hospitality sectors.
London-based Ashmore Group secured approval from the Qatar Financial Centre Regulatory Authority to establish an operational office in Qatar. With approximately US$10 billion already managed for Middle Eastern clients, the expansion strengthens Ashmore’s regional presence.
UK-based ethical property investment platform, Rise Capital, launched two Shariah compliant property investment structures and is onboarding new investors for upcoming development tranches in East Anglia. The investments target, among others, pension trustees, sophisticated investors and high-net-worth individuals.
Asset growth moves
Saudi Arabia’s Sinad Holding Company renewed and expanded its Islamic financing facilities with Saudi Investment Bank, totaling SAR400 million (US$106.66 million). These funds will bolster the company’s working capital and finance ongoing investments, secured by a promissory note and stock pledge.
Malaysia’s Axis REIT aims to secure up to RM3 billion (US$701.58 million) through a dual issuance of senior Islamic medium-term notes and subordinated perpetual Islamic notes. These funds are earmarked for working capital, development and refinancing existing debt.
Prime Bank in Bangladesh introduced the nation’s inaugural Shariah compliant short-term investment opportunity, the Teer Islamic Commercial Paper. This 180-day maturity paper aims to raise BDT500 million (US$4.12 million) for City Auto Rice and Dal Mills.
Turkiye’s Ministry of Treasury and Finance successfully collected 15.25 kg of gold from institutional investors through a lease certificate auction on the 20th May, 2025. These gold lease certificates are set to mature on the 20th May, 2026.
Regulatory initiatives
The Securities and Exchange Commission of Pakistan is pushing for institutional investors to exclusively use Shariah compliant brokers for all securities transactions starting the 1st January, 2028. Despite most Pakistan Stock Exchange trading already involving Islamic-friendly securities, only one brokerage currently holds a full license for Shariah compliance.
The MSCI Emerging Markets Islamic Index will implement issuer capping around the 2nd June, 2025 to enhance diversification and mitigate concentration risks. These modifications will subsequently impact the iShares MSCI EM Islamic UCITS ETF.
