By Daniel Canty
Middle East and Malaysian investors aim to cash in on sea freight boom.
AFB and ARIBL are to develop an Islamic Marine Fund to invest in completed and newbuild marine vessels covering dry bulk carriers, tankers, anchor handlers, crew boats and other support vessels for marine activities.
AFB is an Islamic bank backed by a consortium of Qatar Islamic Bank (70%), RUSD Investment Bank of Saudi Arabia (20%) and Global Investment House of Kuwait (10%). ARIBL is a wholly owned subsidiary of Amanah Raya Berhad, an investment vehicle wholly owned by the Malaysian government.
In a joint statement the banks revealed the Islamic Marine Fund would invest in performance proven vessels that show characteristics for capital and income enhancement through re-deployment.
The maritime focussed investment fund has been conceived to achieve medium to long term stable income and capital growth through the acquisition of income generating marine vessels backed with charters from major oil companies and credible operators.
The fund is investor-managed based on the Ijarah-backed structure, and is targeting an internal rate of return of 12-15%.
"The Islamic Marine Fund will provide opportunities for institutional and sophisticated retail investors globally, to participate and take advantage on the growth of the marine sector. Through this fund, investors will have access to a diversified portfolio of Shariah compliant marine vessels that could potentially generate attractive medium to long-term returns," said Datuk Abdul Latif.
"The investment objective is to assemble a portfolio of quality ocean-going as well as coastal vessels operating within Malaysian waters as well as worldwide," added Faisal Al Showaikh, CEO of AFB.
"This fund, is the first of its kind in Malaysia, and it is reflective of AFB's objective to introduce more Shariah compliant products. We further plan to leverage on our ready access to the GCC market and bring Middle Eastern investors into this fund," added Al Showaikh.
The fund is aiming to raise $250m to finance the purchase of an initial fleet of vessels. A roadshow to the Middle East to promote the Islamic Marine Fund has been planned.