Argyll applauds Guernsey Finance initiative

Tuesday 17 August 2010

Local investment manager Argyll Investment Services Limited (Argyll) today launched the World Shariah Funds PCC Limited, a Guernsey-based suite of Islamic-compliant investments which will be listed on the Channel Islands Stock Exchange (CISX).

The launch follows from Argyll’s participation in the Guernsey Finance presence at the Fund Forum Middle East conference in Bahrain during October 2009.

Mark Margetts-Smith, Senior Marketing Manager at Argyll, said: “Guernsey Finance’s initiative is directly responsible for Argyll being in a position to develop the World Shariah Funds. The financial benefits and worldwide brand exposure is already being felt across a number of businesses in Guernsey. We applaud them for their efforts and look forward to supporting future initiatives.”

Guernsey Finance – the promotional agency for the Island’s finance industry internationally – exhibited at the conference in Bahrain during October 2009 with the support of several industry practitioners, including Argyll. It also secured a speaking opportunity where William Simpson, Managing Partner at Ogier in Guernsey, introduced Stuart Place, Marketing Director at Argyll, to present on ‘Innovation vs. Conservatism: How to achieve results in a post-credit-crunch market.’

This activity resulted in Argyll’s introduction to a Middle East fund promoter and this has, in turn, led to the launch of the three Shariah compliant equity funds which will be distributed globally. Also involved in the funds are a locally based team of legal advisers from Ogier and fund administrators Legis Fund Services Limited (Legis), both of whom were also supporting the Guernsey Finance initiative.

“It is very good news to see these three Shariah compliant funds being launched from Guernsey,” said Peter Niven, Chief Executive of Guernsey Finance.

“Shariah compliant products are extremely popular at the moment, not least of course to reach out to Islamic investors and this launch from a new fund promoter to the Island will particularly enhance the knowledge and reputation of Guernsey in the Middle East.

“This piece of business also endorses the value of Guernsey Finance. It highlights how Guernsey firms can benefit from partnering with us at these conferences if they are prepared to act as part of a professional team focussed on bringing business back to the Island.”

Guernsey has developed a secure environment within which specialist funds can flourish. The Island’s tax neutrality is an important for attracting this type of investment opportunity. In addition, Guernsey’s robust yet pragmatic regulation provides comfort to both distributors and investors. Shariah products sit well within a Guernsey structure and this bodes well for the Island’s future access to the Islamic market. That market is estimated to have investments of approximately US$2.7 trillion worldwide, and there are presently not enough Shariah-compliant products and services to fully meet demand.

The World Shariah Funds have brought three major Islamic investment teams together within a single fund structure: from Malaysia, Reliance Asset Management (Malaysia) with US$4.3 billion assets under management; the south-east Asian CIMB Principal Asset Management Berhad with US$6.85 billion assets under management; and Markaz of Kuwait with US$2.2billion assets under management. This is the first time they have come together in a single offering and clients can be assured that strict criteria are applied in the selection of the companies whose shares are held within the funds. These specifically exclude, amongst others, companies dealing in alcohol, pornography, tobacco or those with highly leveraged balance sheets. From a ‘basket’ of Shariah-compliant companies, a selection is made of those whose earnings are most likely to exceed the market average and the result is an actively-managed portfolio intended to outperform an Islamic equity index.