Fundraising

CIMB Standard to manage $500m Islamic infrastructure fund

CIMB Standard, the joint venture private equity and infrastructure platform of CIMB Group and Standard Bank, is to manage an incoming infrastructure fund aimed at investing in Asia’s “emerging countries”. The vehicle already has $250m of equity commitments from its sponsors.

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CIMB Standard, the private equity and infrastructure fund manager, has won a mandate to invest a $500 million Islamic infrastructure fund.

The vehicle has been jointly sponsored by Manila-based Asian Development Bank and Jeddah-based Islamic Development Bank and will make Shariah-compliant equity investments in emerging countries across Asia including Bangladesh, Indonesia, Kazakhstan, Malaysia and Pakistan.

According to a statement from the CIMB Group, which jointly runs the fund manager alongside Standard Bank, the Islamic Infrastructure Fund (IFF) will be seeded with an initial commitment of $250 million from the joint sponsors.

There is still a substantial amount of wealth in that region and investors there are inreasingly interested in putting their money to work in a way that complies with their faith

Walid Abdelwahab

In the statement, CIMB Group said the fund would “help bridge the gap between Islamic investors who require Shariah-compliant products and project sponsors who need capital to build crucial infrastructure.”

CIMB Group chief executive Dato’ Sri Nazir Razak said: “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.”

He said: “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.”

Investors in the fund are expected to hail from across the Islamic world but notably from the Middle East. Walid Abdelwahab, director of country operations department at Islamic Development Bank said. “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.”