Friday July 3, 2009
CIMB Standard confident of raising US$238mil
KUALA LUMPUR: CIMB Standard, the appointed manager and advisor of the new Islamic Infrastructure Fund (IIF), is confident of raising the remaining US$238mil in the next 12 months to meet the targeted fund size of US$500mil.
Currently, the fund size stands at US$262mil, of which US$250mil is to be contributed by joint-sponsors Asian Development Bank (ADB) and Islamic Development Bank (IDB).
The remaining US$12mil is expected to come from CIMB and Standard Bank, a leading African banking group.
CIMB and Standard Bank are joint-venture partners of CIMB Standard.
CIMB group chief executive Datuk Seri Nazir Razak said they were confident of attracting investors for the fund given the strong backing and creditability of ADB and IDB.
“This is also supported by the demand for such investment that is estimated to exceed US$8 trillion in the coming decade.
“As Asia seeks to claim greater share of the global’s economic pie, heavy emphasis will be placed on its infrastructure development in facilitating sustainable economic growth,” he said after the launching of IIF by Minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop.
Nazir said there was also a gap that they intended to fill as the current economic crisis had seen the retreat of Western investment from the region.
“And now, CIMB Standard, which has strong physical presence in South-East Asia, will also expand into Central Asia due to the fund,” he said.
The IIF is the first major multi-country syariah-compliant infrastructure fund in Asia that will make equity investment in Bangladesh, Indonesia, Kazakhstan, Malaysia, Pakistan and other member countries common to ADB and IDB.
Nor Mohamed said the setting up of Islamic private equity fund targeting infrastructure investment was in line with the Government’s aim to promote Islamic finance, banking and capital markets in the region.
“The establishment of this new fund comes at a fortuitous time for Malaysia and other emerging markets as the majority of private equity funds currently focus on developed or rapidly developing Asian markets,” he said.
IDB director of country operations department (Asia) Dr Walid Abdelwahab expected the IIF to attract capital from the Islamic world, notably the Middle East.
“There is still a substantial amount of wealth in that region and investors there are increasingly interested in putting their money to work (in a way) that complies with their faith,” said Walid.
On The South East Asia Strategic Assets Fund (Seasaf) of US$150mil, Standard Bank chief executive of the Asia Pacific region Nicholas Hamilton said the fund had invested US$70mil in Malaysia, the Philippines and Indonesia.
“We expect the remainder of the fund to be fully utilised in the next six to eight months,” he said.
CIMB Standard is the adviser of Seasaf, which is a private equity fund focusing on energy, infrastructure and natural resources in South-East Asia.