Winner: Kuwait Finance House
With the collapse of the real estate market in many of the world’s leading economies at the heart of the financial crisis, it has not been an easy time for the Islamic banking industry, which relies so much on the sector. Still, the downturn in the property market does not seem to have affected Kuwait Finance House if the performances of some of its funds are anything to go by.
Last year the firm sold most of its investments in its first Asia real estate fund, generating a net profit of nearly $40 million and an internal rate of return of 15%. It has provided shareholders with an annual profit of 9% distributed quarterly since the fund was launched in 2006. Among its investments was the Pavilion residential development in Kuala Lumpur and the biggest shopping mall in Malaysia.
Another of the firm’s real estate funds, one focused on Turkey, has also achieved impressive returns. The fund, which has a capital of $14.25 million, has provided shareholders with 10% annual profit. The fund invests in rented warehouses near the Ataturk International Airport, which is regarded as a prime location.
One market KFH will focus keenly on in the coming year is Saudi Arabia, where its subsidiary received regulatory approval to begin investing in November.
