Saudi Arabia’s Qadr Financial is placing its faith on emerging asset managers, rather than those with big brand names, to build its own service niche in the Kingdom’s Shariah investment advisory landscape.
“Technically they have no track record because they have never managed a fund under their names,” Akmal Saleem, the founder and managing partner of the fully Shariah compliant firm, which has advised on some US$400 million worth of deals, told IFN Investor.
Emerging managers typically lack the draw of branded managers and their expertise in running proprietary funds as well as private equity, venture capital and limited partnerships.
But many also came with complementary – and sometimes, unique – strengths and other track records, Akmal said.
“You could have somebody who’s managed billions of dollars in a career but if they go out to set up their first fund, they’re still considered an emerging manager.”
Qadr’s ability to understand the psyche and challenges of these individuals had been a boon to the firm, which discovered some “extremely unique investment theses” from them, Akmal said.
“For example, someone might be an expert in a particular sector and then leaves that job and sets up a fund,” or the investment premise is not easily available in an established market.
Experience has bolstered this firm’s native knowledge of Saudi jurisdictions and investment structures, which also smoothened the path for emerging managers journeying towards their first fund.
“Some US funds that we’ve helped navigate in Saudi Arabia (have come to) understand the LP [limited partner] landscape, how to successfully raise capital, how to understand what the appetite looks like for their particular investment thesis and etc.”
Risk-wise, there are also distinct advantages in working with emerging managers, especially in emerging markets such as Indonesia, where a venture capital boom has been anticipated, said Akmal.
“Investors are not going to go and set up a structure in in Indonesia to invest; so they invest into an emerging manager, who is setting up specifically a thesis for Indonesian companies.”
Outside of emerging managers, Qadr, which styles itself as a private investment boutique, has launched a US$150 million venture capital fund for a Saudi royal family, while supporting venture capital work between the UK and South Korea.
