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Best Islamic fund manager
CIMB-Principal is not the biggest fund manager in Islamic finance; that’s the Al Ahli business within Saudi Arabia’s National Commercial Bank. It’s not even the biggest Islamic mutual fund manager in Malaysia, a title held by Public Mutual. But it stands out for being at the forefront of efforts to make Islamic asset management international.
This stands to reason: it was the first licensee under the Malaysia International Islamic Financial Centre, which exists specifically to make Malaysia a hub of international Islamic capital, and it combines the smartest bank in Malaysia with the global reach of Principal Financial Group. Launched only in 2008 in the middle of the financial crisis, it had $1.13 billion under management as of October 31 2012, having grown 45.6% in the previous 12 months alone.
It is most visible on the mutual fund and product development side. Through the broader CIMB-Principal venture, 21 products are offered to individual investors; through CIMB-Principal Islamic itself, there is a focus on global equity, regional Asian equity, global sukuk and regional Asian sukuk. Where it really stands out, though, is in taking these funds through Dublin for Ucits certification to reach retail mass-affluent investors and takafuls. Many have talked about doing this – Al Ahli, for example – for years but few have done it. CIMB Principal Islamic now has three Ucits-compliant Islamic funds (global emerging markets, Asia Pacific ex-Japan, and Asean equity) on what is the first Malaysian-managed fund platform approved in Ireland. From there has followed registration in the UK, Switzerland, Germany and Singapore, with negotiations under way in Saudi Arabia, Bahrain and the UAE. At some point a large part of the industry is going to have to take this approach; first-mover advantage is likely to be considerable.
On top of that, CIMB-Principal has sought to garner most of its assets not through mutual funds but through direct mandates with pension funds, sovereign funds and central banks, as well as playing an advisory role to asset managers with a local presence in order to capture family offices and private banks, particularly from the GCC.
