A newly created firm in the UAE is seeking investments for its Islamic clients, reports Michael Saleh Gassner from Germany.

Wednesday, December 08 – 2004 at 11:1
 
 
Dubai-based Tabarak International is working with 25 Arab institutions and wealthy individuals that are looking to add asset-backed securities to their portfolios, either directly or through funds.

The firm is headed by Khuram Hussain and hopes to team up with European investment banks and fund managers to craft products that will have appeal to these investors.

Tabarak said these investments would involve liquid securitizations with floating-rate coupons. The firm is particularly interested in issues backed by trade receivables, operating leases and residential and commercial mortgages.

This is because it is possible for holders of these instruments to avoid taxes that Middle Eastern governments collect on most investments and then distribute to the poor.

While quirks in Islamic law have prevented the development of a significant structured-finance market in the Middle East, Hussain says it would be easy to structure appropriate investments.

He says Tabarak’s clients would commit at least $30 million to deals complying with Islamic law, with new and innovative issues potentially drawing far more than that. It is also possible that Tabarak would take stakes in some of the products in exchange for lining up the deal.

Hussain founded Tabarak in June, after resigning as chief executive officer of iHilal Financial Services – a fund-management company whose vehicles feature share classes for Islamic investors. Over the last few years at the firm, Tabarak has raised more than $250 million for entities that have invested in commercial real estate products.

Tabarak is currently establishing operations in Dubai and will soon open an office in London.

 

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