CASE STUDY
Shariah-compliant Global Equity
Middle Eastern Asset Manager | 2021
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Shariah-compliant Global Equity
Engagement at a glance
Client Country/Type: | Middle Eastern Asset Manager |
Year: | 2021 |
Asset Class: | Shariah-compliant Public Equity |
Mandate Size: | USD 30 million (across 2–4 managers) |
Mandate Geography: | Global |
Mandate Type: | Pooled funds | Service Provided: | Manager selection | Investment Objectives: | 2% p.a. (gross) outperformance over a market cycle |
Client-specific concerns
The client, a prominent Middle Eastern asset manager, was seeking to invest in Shariah-compliant global and broad regional equity strategies—irrespective of investment style—to play a satellite role within its newly launched global growth fund.
At the outset of this search, the asset manager indicated that it wanted to find a handful of active managers to provide the alpha, or outperformance, necessary to complement the passive core allocation of its new, listed fund product focused on global growth. The manager also expressed strong preferences regarding minimum fund size (to mitigate client concentration risk) minimum record length (three years) and flat fees. Additionally, the client required bfinance to highlight non-domestic global equity managers that could offer a compelling Shariah-compliant proposition.
Outcome
- Defining the manager universe: the bfinance team conducted a deep search for pooled funds that met the client’s minimum mandate requirements, leveraging proprietary market research and multiple third-party data sources. Despite the somewhat narrow universe, bfinance was able to invite 78 managers to participate.
- Adjusting requirements to provide wider choice: although the client was well versed in local managers, bfinance helped it recalibrate its search parameters throughout the process and seek out a wider pool of non-domestic asset managers. The bfinance team also conducted a targeted reengagement of larger asset managers, which facilitated increased participation and expanded the range of 'globally recognised' manager names without impacting project delivery.
- Assessing sources of alpha: the client was open to all investment styles, and so—to avoid ‘apples-to-oranges’ comparisons—bfinance sought to understand the key drivers of alpha for each strategy independently.
Our specialist says
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This manager search exercise on behalf of a Middle Eastern asset manager was a testament to prior bfinance efforts to define and explore the independent Shariah manager landscape—ensuring good participation from a tight universe of Shariah-compliant pooled funds. Despite the smaller pool of managers, the client was still afforded the flexibility to customise requirements throughout the process. Unique to the project (and necessary, given the complexity the client’s investment vehicle), bfinance supported the implementation of the funding stage, facilitating continuous dialogue between the chosen managers and the client.
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United States, Chicago
220 North Green Street
Chicago
IL 60607
Telephone: (312) 829-4353
Email: info@bfinance.com
-
Canada, Montréal
1250 Rene Levesque Boulevard West
Suite 2200, Montreal
Québec H3B 4W8
Telephone: +1 450 902-4965
Fax: +1 514 393 9069
Email: info@bfinance.com
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Canada, Toronto
88 Queens Quay West
Suite 2500, Toronto
Ontario M5J 0B8
Telephone: +1 (416) 560-7275
Email: info@bfinance.com
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EC4R 1BN
Telephone: +44 20 7747 8600
Fax: +44 20 7747 8600
Email: info@bfinance.com
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Telephone: +49 89 55 29 59 00
Fax: +49 89 55 29 59 00
Email: info@bfinance.com
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Telephone: +33 1 45 02 64 00
Fax: +33 1 45 02 64 01
Email: info@bfinance.com
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Symphony building
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1082 MS Amsterdam
Telephone: +31(0)20 794 61 00
Email: info@bfinance.com
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United Kingdom
36 Queen Street, London
EC4R 1BN
Telephone: +44 20 7747 8600
Fax: +44 20 7747 8600
Email: info@bfinance.com
-
Germany
Theresienstraße 1
80333 Munich
Telephone: +49 89 55 29 59 00
Fax: +49 89 55 29 59 00
Email: info@bfinance.com
-
France
49, Avenue d'Iéna
75016 Paris
Telephone: +33 1 45 02 64 00
Fax: +33 1 45 02 64 01
Email: info@bfinance.com
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Netherlands
Symphony building
Gustav Mahlerplein 3-115, 26th Fl
1082 MS Amsterdam
Telephone: +31(0)20 794 61 00
Email: info@bfinance.com
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Australia
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NSW 2000
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Email: info@bfinance.com
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Australia
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NSW 2000
Telephone: +61 (0)2 8052 3930
Email: info@bfinance.com
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China
Level 20, Infinitus Plaza,
199 Des Voeux Road Central, Sheung Wan
Telephone: +852 3953 7874
Email: info@bfinance.com