Tuesday December 14, 2010

CIMB unit eyes US$100mil from Dublin funds


CIMB-Principal Islamic Asset Management says syariah funds can hit target by end-2011

KUALA LUMPUR: CIMB-Principal Islamic Asset Management Sdn Bhd (CPIAM) is targeting about US$100mil in sales for its Dublin domiciled collective investment in transferable securities (UCITS) III umbrella syariah funds by the end of next year.

UCITS are a set of European Union (EU) directives that aim to allow collective investment schemes to operate freely throughout the European Union on the basis of a single authorisation from one member state.

These funds will act as a gateway for the company to launch more funds worldwide. For a start, chief executive officer Datuk Noripah Kamso said the company would launch three funds under the UCITS III qualifying umbrella structure, provisionally called CIMB-Principal Islamic Asset Management Funds Plc, and hoped to bring in about US$100mil by the end of next year.

This will be housed under a management company which is an Irish domiciled 100% subsidiary of CPIAM named CIMB-Principal Islamic Asset Management (Ireland) Plc.

The three funds are Islamic Global Emerging Markets Fund, Islamic Asia Pacific ex-Japan Fund and Islamic Asean Equity Fund.

By having funds on a Dublin platform, it shows that we have a global track record and we will be able to attract institutional mandates and manage their funds on a global level.

We hope to become investment managers for global institutional funds over the next two to three years.

This will facilitate our role to attract more funds into the country and help the Malaysia International Islamic Financial Centre (MIFC) position Malaysia as the global Islamic asset management hub,'' she said during an interview.

Asked on the merits of UCITS funds, Noripah said the greatest advantage of UCITS over non-UCITS funds was that they were the most regulated collective investment vehicles in the EU, offering the best legal protection to investors.

The other merits of these funds are their global brand and the ability to be freely marketed across Europe.

She said since the global financial crisis, the advantages of UCITS funds had become relevant to the more cautious and conservative investors.

Investors, Noripah added, were seeking more liquidity (UCITS funds are redeemable at net asset value at least bi-monthly by law) and transparency in their portfolios as well as looking to reduce their risk appetite by investing in a more diversified portfolio.

Apart from this, these funds also tended to receive the most favourable tax and regulatory treatment in the EU, she noted.

Asked on the returns an investor could expect from these new funds, she said it would be around 4% and higher than the traditional fixed deposits.

Target customers for these funds would be institutional and high net worth clients, family offices and takaful players worldwide.

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