Preqin’s Funds in Market database shows that there are currently 13 private equity funds in market which are Sharia compliant. These funds are collectively targeting $3.3bn in capital commitments. Four of these funds have a focus on MENA opportunities, four focus on European investments, and the same number focus on Asian investments. There is also one Sharia-compliant fund in market with a focus on Latin America. The largest share of capital being raised is by Sharia-compliant funds targeting investments in the Middle East, with 42% of capital being channelled into this region.
The largest proportion of Sharia-compliant funds is being raised by Middle Eastern fund managers, with five funds being raised by firms located in the region. They are collectively targeting $1.7bn in capital commitments, or more than 50% of the total capital being raised. This is closely followed by four funds being raised by Asia-based firms, but with a much smaller aggregate target of $425mn. Three funds are being raised by Europe-based fund managers, and one fund is being raised by a fund manager located in North America.
The majority of these Sharia-compliant funds are real estate funds, with seven funds applying this strategy. There are additionally three growth funds in market, one venture capital fund, one buyout fund, and one infrastructure fund.
The top three largest Sharia-compliant funds in market are Arab Financing Facility for Infrastructure, Barwa Gazprombank Russia Real Estate Fund and TFI-Hines Brazil Income Real Estate Fund. Arab Financing Facility for Infrastructure is a $1bn infrastructure fund with a focus on the MENA region. It is being raised by IFC Asset Management Company, a US-based fund manager.
Over the past 12 months, five Sharia compliant funds have held a final close, collecting over $700mn in capital commitments. The largest fund to close was Trive Capital Fund I, a turnaround fund with a focus on North American investments, which garnered $300mn in investor commitments.