CIMB To Manage Islamic Infrastructure Fund

CIMB Standard, Asian private equity and infrastructure fund specialists, have been appointed manager and advisor to a new $500 million Islamic Infrastructure Fund, jointly sponsored by the Asian Development Bank (ADB) and the Islamic Development Bank (IDB).

A Statement issued by the firm noted that, the Islamic Infrastructure Fund (IIF), Asia's first major multi-country Islamic infrastructure fund, will make Shariah-compliant equity investments in emerging countries in Asia with significant infrastructure opportunities to meet their developmental needs.

Amongst such countries are Azerbaijan, Bangladesh, Indonesia, Kazakhstan, Malaysia, Pakistan and other member countries common to both ADB and IDB. The IIF will receive an initial commitment of $250 million from the joint Sponsors - ADB and IDB. The IIF will also help bridge the gap between Islamic investors who require Shariah-compliant products and project sponsors who need capital to build crucial infrastructure. The IIF will adopt a unique investment strategy and seeks to achieve a superior risk-return proposition for investors.

"As Asia seeks to claim a greater share of the world economic pie, heavy emphasis will be placed on its infrastructure development to facilitate sustainable economic growth. With demand for such investments estimated to exceed $8 trillion in the coming decade, we are very confident about the appetite for this new fund" said CIMB Group Chief Executive, Dato' Sri Nazir Razak at the launch of the fund. He added "The majority of private equity funds are focused on large markets such as China and India creating a gap which we intend to fulfil by leveraging on our expertise as a focused regional player."

Nicholas Hamilton, Standard Bank's Chief Executive of the Asia Pacific region said "Today's launch of the IIF marks a significant milestone in our partnership with CIMB Group, which began in 2006, and is now a leading investor in Malaysia and Southeast Asia. As a recognised specialist emerging market bank, we are able to leverage on our global network to ensure long-term sustainability. Together with CIMB Group's vast network and experience in Islamic banking, we firmly believe in the success of our joint venture."

ADB's Private Sector Operations Department, Director of Capital Markets & Financial Sector Division, Robert van Zweiten, said, "Infrastructure in many of the countries that are members of both ADB and IDB is less developed than the Asian average. We expect the fund to help channel investments into critical infrastructure projects in the region which will, in turn, improve the prospects for economic growth and poverty reduction."

Meanwhile, IDB's Director of Country Operations Department (Asia) Dr. Walid Abdelwahab, said that IDB expects 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," he said.