La Française group has launched its first Sharia compliant separately managed account in the area of property securities on behalf of an Islamic banking and investment services provider based in Kuwait – as it seeks to build on the launch in 2012 of its first Sharia compliant OPCI, or collective direct property investment vehicle.
The latest capability has been brought to market by the group’s global property securities investment business La Française Forum Securities, which is a specialist in listed property that applies Sharia screening capabilities of IdealRatings, itself a provider of Islamic capital markets solutions in the area of responsible investments. IdealRatings covers some 40,000 listed securities, including around 2,000 property securities, La Française notes. The screening process is set up to facilitate global screening of securities for Sharia compliance in accordance with any Sharia rulebook.
La Française Forum Securities’ role in the process is to define the securities universe from a Sharia screened pool. From some 150 securities the relevant portfolio is concentrated on some 30-50 stocks.
Jana Sehnalova, managing director of La Française Forum Securities and portfolio manager, said the work done so far could lead to an additional fund being offered to market: “We have worked on developing this unique investment strategy for a few years and are very pleased to be able to bring it to life and offer institutional investors with an Islamic finance focus, from the Middle East and South East Asia or elsewhere, an opportunity to diversify their asset allocation with Sharia compliant real estate securities; this asset class is starting to be attractively valued again, with double digit discounts to NAV, and an ability to identify and exploit mispricing between public and private real estate markets globally.”
“Recognizing the potential interest in this strategy, we are also investigating with Groupe La Française the viability of developing a fund as part of the existing product line managed by Groupe La Française.”