Feigning devotion: UK focuses efforts on halal investing
“This sector is beginning to make waves in the U.K. but needs to be nurtured from alternative investment to major league player,” Heaton said.
With Muslims comprising 25 percent of the world’s population and 10,000 Muslim millionaires in Britain alone, the Islamic investment sector has become a financial powerhouse in the U.K., according to a press release issued by London Central Portfolio Limited. The government recently announced a 200 million pound ($329.7 million) sovereign sukuk, (the Islamic equivalent of a bond), the London Stock Exchange is launching a dedicated Islamic Index and the mayor of London is planning a Shariah compliant technology fund: a clear message that Shariah is here to stay.
London has taken in over 11.7 billion pounds of Islamic investment in the last 10 years, making it the largest Islamic financial center in the Western world.
However, the industry is also booming on a noninstitutional level as Muslim investors review their portfolios and seek out Shariah-compliant options.
“We have seen a growing demand among consumers for Shariah compliant investment products in the U.K. as well as from the Middle East. However, these investors are still limited in their options and do not have access to the diverse range of products on offer to the conventional market,” said Naomi Heaton, CEO of LCP, the only company to offer a Shariah-compliant residential fund in the U.K.
“Our fund offers access to the strong performing private rented sector in Prime Central London and has therefore proved a popular proposition with one third of subscriptions coming from Muslim investors,” she added.
Faizal Karbani, CEO of wealth management firm Simply Sharia, added: “Funds such as those structured by LCP represent a pioneering step forward for the Islamic wealth management sector, which is still in its infancy despite its rapid growth globally from $1.45 billion to $1.3 trillion since 2002. There are still only 765 global Islamic mutual funds compared with 60,000 in the conventional finance sector.
“For the Islamic Finance industry to expand and progress in the West, it needs to offer more Shariah compliant investment products and financial planning opportunities. It is our mission to identify these and offer them to our Muslim clients.”
LCP and Simply Sharia are joining forces to organize road shows to bring together industry experts, issuers and investors for lively panel discussions and Q-and-A sessions, looking at the best Islamic investment opportunities in the market today and how Muslim investors can manage their money most effectively.
The first road show will take place in Manchester on March 26, hosted by Signature Tax. The shows will continue at Birmingham, Leicester and London.
Mohammed Kola, senior partner at Signature Tax, explained:
“Islamic finance is becoming more and more prevalent in modern society as individuals are making choices not just on the basis of financial gain, but in light of their religious beliefs and a desire for an ethical dimension. Manchester is a particular hot spot at the moment, having seen its Muslim population increase 73.6 percent since the 2001 census.”
Topics for the event will cover tax breaks in the commercial property sector, LCP’s new Shariah-compliant residential property fund, raising competitive Shariah-compliant finance for business enterprises, compliant pension schemes for employers and retirement and inheritance planning.
“This sector is beginning to make waves in the U.K. but needs to be nurtured from alternative investment to major league player,” Heaton said. “We are, therefore, delighted to be holding these Islamic finance seminars to inform Muslim investors of the broadening investment options on offer in the U.K.”
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