By Bernardo Vizcaino
SYDNEY, Oct 9 (Reuters) - Australian fund manager CrescentWealth has appointed the Bank of London and The Middle East(BLME) as the investment sub-advisor to its Islamic cash fund,to manage its allocation in sukuk, or Islamic bonds, the companysaid on Wednesday.
The move marks the first time Australian retail investorswill have access to sukuk - investment certificates that followreligious guidelines such as a ban on interest and monetaryspeculation.
Crescent Wealth's existing range of sharia-compliantproducts includes a domestic equity fund, and it plans to launchan international equity and property funds later this year.
"The aim is to cover all asset classes, towards offeringcustomers a balanced superannuation (pension) solution," TalalYassine, managing director of Crescent Wealth told Reuters. "Thelong-term aim is to distribute the cash fund through asuperannuation platform in Australia."
Crescent Wealth has under A$5 million ($5.1 million) inassets under management and advice, with A$1.14 milion in thecash fund, and it sees significant potential for Islamic fundsin the Australian market.
Crescent also plans to launch the country's first Islamicpension fund, and hopes to build the fund to between A$4 billionand A$6 billion in five years.
Under the agreement, BLME will manage the fixed incomeportion of the cash fund, capped at 50 percent of holdings andlimited to investment-grade sukuk. The remaining cash componentwill be held in term deposits with HSBC Amanah, the Islamic armof HSBC.
BLME, the largest Islamic bank in Europe, already manages asimilar income fund that is 55 percent invested in sukuk andhas $60.9 million in assets under management. It launched a highyield fund in May of last year, which is 95 percent invested insukuk with $11 million in assets.
"2012 has been a landmark year for sukuk," said NigelDenison, head of asset management and treasury at BLME. "Aslonger dated U.S. dollar swap rates fall, the sukuk market willcontinue to out-perform many conventional bonds and in doing soattract new investors on a global scale."($1 = 0.9796 Australian dollars)
(Editing by Richard Pullin)
Keywords: ISLAMIC FINANCE/FUNDS