Oman’s Ubhar Capital leans toward Shariah compliance following Waqf success

In setting up Oman’s first institutional Waqf in early 2024, Ubhar Capital has seen this achievement becoming a catalyst for growth of its asset management operations – resulting in the firm converting its existing conventional fund to be Shariah compliant as well.

Since inception, the Gheras Endowment Investment Fund has doubled in size from OMR1.4 million (US$3.65 million) to OMR3.5 million (US$7.459.09 million) as at the 31^st August 2025 – driven by new subscriptions from Waqf organizations attracted to its liquidity and diversified mandate, Asset Management Manager Mohammed Al Subhi told IFN Investor.

As an open-ended fund with public listing, the Gheras offering has higher transparency uncommon in traditional Waqf structures. “We publish the NAV weekly, which makes it easy for the investment community to track performance. This transparency was a key selling point during our roadshow.”

Launched in partnership with the Imam Jaber Bin Zaid Foundation, this fund accepts contributions exclusively from registered Waqf organizations, highlighting its specialized purpose. Individuals can invest indirectly by contributing through existing Waqf unit holders, with flexible options for both permanent and temporary endowments.

While there is no strict minimum period for temporary placements by individuals – where returns are directed to the chosen Waqf organization, while the capital is returned to the original endower – Mohammed said: “We encourage longer commitments of one, three, five or even 10 years, because the fund targets around 7% annual returns. Longer durations maximize the benefits.”

The Waqf investment allocation is 70% fixed income and 30% equities. Sukuk makes up the bulk of the fixed income securities, with the others being equities, REITs, investment funds plus money market funds.

In setting up this Omani endowment fund, Ubhar Capital took a broader approach as Mohammed noted that traditional Waqf funds have historically focused on single-purpose causes and were primarily invested in illiquid real estate such as land and farms.

While the Waqf welcomes international investors, regulatory rules prohibit active marketing outside Oman. “If someone from Saudi Arabia approaches us and wishes to subscribe, we can accept them. But we cannot market the fund directly in Saudi Arabia. However, we can work with agents such as private wealth managers who introduce the fund abroad.”

As an investment banking firm that also offers asset management services, Ubhar Capital manages two other funds – one being the conventional equity-focused The First Mazoon Fund established in 1997.

The second is the Ubhar GCC Fund – which has just been converted from a conventional structure to be Shariah compliant and called the Tarabat Fund. Mohammed said this is a balanced fund with 50% in fixed income and 50% in equities.

While Ubhar Capital plans to launch new thematic funds, the firm’s main priority is to increase the AuM of its existing funds. “We’ve seen strong interest, especially from retail clients seeking Shariah compliant products, and are targeting institutional investors as well,” Mohammed said.