Islamic Fund Management
20
Alternative
and Islamic
Funds
Description Assets Invested In
national objectives such as economic development,
capital maximisation and stabilisation (PWC,
Sovereign Investors 2020).
such as oil and gas,
private equities.
Ijarah Fund Invests in real assets, which are then leased and
generate rental payments to the unit holders. A REIT
is an example of an ijarah fund.
Leased assets.
Murabahah
Fund
Involves the purchase and sale of commodities or real
assets on deferred payment terms. An example is a
commodity murabahah fund.
Commodities, real
assets.
Hajj Fund Entails collecting, managing and investing the savings
of those wishing to go for their hajj (pilgrimage). An
example is Lembaga Tabung Haji―popularly known
as Tabung Haji (Pilgrimage Fund) in Malaysia.
Shariah-compliant
investments, e.g.
Islamic securities,
commodities, assets.
Waqf Fund Involves the management of waqf properties, and
investing the returns in Shariah-compliant assets.
Properties,
investments with
social objectives (e.g.
healthcare, education,
poverty reduction).
Sources: ISRA (2015), ISRA
2.1.5 General Principles of Fund Set-Up, Historical Evolution, Key Global Trends
The basic principles of fund set-up, as briefly noted in are applicable to both
conventional and Islamic funds. Setting up a fund involves considering key aspects such as
determining the domicile country that offers the right level of a regulatory framework to
establish the fund, accounting for the target investors and their needs, determining the
investment objectives and strategies of the fund, and selection of securities. These are
considered during the different stages of the fund’s setting up.