New Star Asset Management has teamed up with a Dubai-based bank to launch a Sharia compliant property fund for Middle Eastern investors.
The performance of the Emirates Islamic Global Property Fund, set up in conjunction with Emirates NBD Group will be based on the performance of New Star’s £635m International Property Fund, with New Star’s portfolio acting as an index which will determine the returns investors in the new fund receive.
Best selling fund
The fund will have daily dealing, and is thought to be the first Sharia compliant daily-dealing property fund. It will have two share classes; for private investors, with a minimum investment of $25,000 (£12,500); and for institutional investors with a minimum investment of $1m (£500,000).
The New Star International Property Fund was launched in June, and was the best selling private investor fund across all asset classes in 2007, according to the Investment Management Association.
It is invested around 40% in Asia-Pacific, 9% in Europe, 12% in property shares and the rest in cash. It has provided a return of around 3% since its inception, according to fund information service Trustnet, compared to UK based funds which have produced negative returns of up to 20% in the same period.
David Marshall, Head of Product Development at Emirates Investment Services, said: ‘The Emirates Islamic Global Property Fund is believed to be a first in terms of its offering daily liquidity and Shari’a compliant exposure to direct property assets, while focusing on European and Asian direct commercial property.
‘Investors in the Gulf Cooperation Council countries are demonstrating the importance of Sharia-compliant investment opportunities and the performance of the New Star International Property Fund led to our decision to partner with New Star.’