Usage of Shariah wrappers on conventional funds has helped drive growth in assets under management (AuM) at UAE-based Aditum Investment Management, Global Fixed Income And Multi-Asset Strategies Head Omer Chowdhry told IFN Investor.
When Omer joined in April 2021, the Aditum desk that he oversees had less than US$100 million in AuM – which has since grown to over US$2 billion currently. One main reason for this phenomenal growth was that Aditum had spotted a way to exploit a void in the market with its Islamic window operations, explained Omer.
“There was a lot wealth in UAE that was starving for Shariah compliant returns.” To meet this demand, Aditum put in the effort to craft Shariah compliance wrappers around conventional fund offerings.
“This is where we come in with our Shariah Investment Management Structure (SIMS). Let’s say one of the big Shariah compliant banks in the GCC region is keen on a fund, for example. Then, we use our SIMS to make it Shariah compliant.”
This strategy also had a positive effect on Aditum’s conventional fund offerings. “Our total AuM reached more than US$7.2 billion as of 30th October 2024. Out of this total, around US$6 billion makes up the Shariah compliant portfolio, of which our in-house actively managed portfolio is slightly over US$2.1 billion.
“We have reached the point where we are not only providing Shariah compliant structures, but also rapidly structuring totally new funds with a fast turnaround time of up to one month. So, we get things moving pretty quickly and this is one of our key strengths.”
Aditum manages plain fixed income funds and open-ended funds of both Islamic and conventional versions – applying varying strategies that include alternative assets and venture capital investing.
The firm also offers liquidity funds and recently launched its first balanced strategy fund with stocks and bonds with a Shariah compliant overlay for distribution via various banks UAE and Oman. The company is further focused on rolling out more feeder fund structures.
“We can structure funds in three different domiciles. Obviously we’ve been doing Cayman assets and a lot of DIFC (Dubai International Financial Centre) feeder funds and we’re launching our own funds which are now domiciled in Dubai.”
With an additional six funds soon to be rolled out and another three more funds to be launched in subsequent months, Aditum is concretising its presence in the UAE, said Omer.
Beyond its strong client base in UAE and Bahrain, Aditum is seeking more partnerships with banks in Qatar and Oman to grow its reach. “We also intend to venture into the Asian market via Malaysia and Indonesia,
“We have been approached by an asset management arm of one of the biggest Saudi banks. For the first time, our fund will be directly on board with the treasury of a big institutional bank. The capital from the bank will flow into a global Sukuk strategy and following this, they might ask us to do a separate fund for them.”
