ISLAMIC FUNDS - IFIR 2010 from EY Ernst-Young

On Sept 2, 2010 EY published the 4th "Islamic Funds and Investments Report" (IFIR 2010) emphasizing the importance of fund managers to pay sufficient attention to the investors preferences, focusing on enhancing the quality of their offering and moving away from transaction-only approach to comprehensive Wealth management solutions.


Pierre Weimerskirch, EY Luxembourg, Mark Smyth, Amanie Islamic finance Consultancy and Education LLC, and Zaid el-Mogaddedi, Institute for Islamic Banking and Finance (IFIBAF), discussed what steps can be taken to attract funds from the Middle East to use Luxembourg as a platform. Maybe some of their analysis can be useful for the Indonesian market.

The effects of the global financial crisis indeed reshuffled the cards somewhat the market :

A slight shift out of real estate and equity to ETF’s and hedge funds

Larger deposits at banks instead instead of invested in bonds

Smaller scale funds will face problems to sustain and larger scale, international pooling

Perceived need to focus on a well defined fund strategy and adherence thereto, flexible economic and risk models in order to regain investor confidence

Performance based remuneration and transparency in cost structure

A stagnation in the assets managed by the Islamic funds has been noticed with a threshold of 52,3 billion US in 2009, whilst 2008 reached 51,4 billion US. In the past year only 29 new Islamic funds would have been created, while at the same time the accumulated wealth in the Islamic world has grown from 2008-2009 not less than 20 % to reach 480 billion US. Abundant opportunities for fund managers therefor should be present.

Source : http://www.abbl.lu/articles/islamic-funds-and-investments-report-ifir-2010-conference#dropdownbox – Sept 2, 2010 and http://www.ey.com/LU/en/About-us/about-us_events-sponsorship_ifir_02092010 - Sept 2, 2010