Riba-free trade financing fund for Africa, Latin America

Mauritius-based Alteia Fund Management is carving a niche in the Islamic investment landscape via commodity trade financing fund offerings that span exports across continents, CEO Kevin Ramsamy shared with IFN Investor.

“We finance around 10 different commodities. For instance, we export fruit juice from Ghana and Brazil to the US market. In another deal, we buy orange juice from Egypt, process it in Ghana, then export to the US in a fully Shariah compliant way.”

This endeavor is backed by the firm’s 10 funds for African operations plus three funds registered in Saudi Arabia and another is being planned for the UAE. Of these, two African funds – which are Cayman-registered – are Shariah compliant, as are the three Saudi funds, said Kevin.

“Trade finance by itself is a Shariah product, it’s a buy-and-sell transaction. All the investments we’ve executed have used either the Murabahah structure or Musharakah, depending on the client, and we’ve also used Mudarabah. The transaction itself is not interest-based.”

Each trade deal is structured individually, with its own jurisdiction, commodity type and contractual framework. This level of customization makes for distinctive assets handled by the funds, Kevin explained. “For a Shariah investor, getting access to these kinds of transactions is not easy.”

Formerly known as Barak Fund Management, the firm was founded in 2009 to provide alternate financing to export-oriented businesses which struggled to get bank loans. Barak suffered a liquidity crisis during the COVID-19 pandemic – which led to an early 2023 management buyout.

Rebranded as Alteia, the firm expanded its operations into the Middle East, and its AuM has since grown to about US$650 million. Kevin said the investor pool comprises about 40% from Europe, 25% from the GCC, 15% from Japan and the remainder from Africa.

All the Shariah funding comes from the GCC region. “In the past, we had Shariah-friendly investors who were fine with a wrapper, but that’s no longer the case. Every transaction must be fully Shariah compliant.”