Elaf-Algebra launch $100m Sukuk Fund

Gulf Daily News: Bahrain-based Elaf Bank and Algebra Capital have announced the launch of The Sukuk Fund. Targeting an initial size of $100 million and returns above eight per cent, the open-ended fund seeded by Elaf Bank and managed by Algebra Capital will provide exposure to Sharia-compliant securities issued in the Middle east North Africa and Asia region (MENASIA).

Elaf Bank will also serve in an advisory capacity on the fund's investment committee.

"The Sukuk Fund is an attractive vehicle to gain exposure to and benefit from the rapidly evolving and attractive Sukuk asset class capitalising on Elaf Bank's access to and expertise in Islamic finance and benefiting from Algebra Capital's investment process and extensive MENA research capability," said Elaf Bank chief executive officer Dr Jamil Jaroudi.

"We are launching this now because we can see value on the market. This is our first fund but we will be coming to the market with others in the future.

""By launching The Sukuk Fund, we hope that it will be considered by investors as a unique financial product providing diversification for their portfolios through the addition of Sharia-compliant income generating issues."

"The global sukuk market now exceeds $100 billion and the MENA region's contribution to it is expected to continue," said Algebra Capital managing director and portfolio manager Mohieddine Kronfol.

"MENA sukuk now represents 33pc of the global sukuk market and a little more than 33pc of MENA corporate fixed income issues. Strong economic fundamentals, large infrastructure projects and increasing capital market activity support and advance prospects for the Sukuk market in our region."

He said the sukuk market has grown dramatically over the past three years.

"There is now much more liquidity in the sukuk market and a lot more secondary trading and this is going to continue to increase."

"We are very happy to be launching and managing The Sukuk Fund, and on working with Elaf Bank," said Algebra Capital founder and chief executive officer, Ziad Makkawi.

"This will be the second fund managed by Algebra Capital in its fixed income line of business. The Sukuk Fund reflects both our constructive view of the region's fixed income markets as well as the importance of the Sharia-compliant space to us."

Elaf Bank was established in June 2007 with a paid-in capital of $200m and an authorised capital of $500m.

The bank's primary focus is to originate, structure and offer financial products that will strengthen the current state of the primary and secondary market for sukuk.