The initial offering for the Ibn Battutah Asian Growth Fund, giving GCC investors the chance to place funds in mainly Islamic Asian markets, was due to close on 22 January. But the arrangers say the plan to raise $100 million has proved an over-optimistic target (MEED 16:12:94).
‘We won’t get that high. The fund will be quite a lot smaller,’ says David Caillard, senior manager for capital markets at Banque Indosuez Bahrain Offshore Banking Unit. The Bahrain-based bank with Carr Indosuez Asia are arrangers for the fund, which was launched by Al Hillal, an offshore company incorporated in Labuan.
Caillard says investor sentiment was largely affected by the unsettled performance of the Asian markets during the past few weeks. However, he says the open-ended structure of the fund will allow additional investors to join as confidence builds up.
Funds raised in the initial offering will start being placed at the beginning of February. About 50 per cent of the funds will be directed at equities in the Muslim-majority Asian states of Malaysia, Indonesia, Pakistan and Bangladesh. The remaining funds will be directed towards markets with a sizable Muslim minority, including Thailand, Singapore, the Philippines, Sri Lanka and India. Funds may also be placed in GCC equities.
The Asian growth fund is the first equity syndication to be arranged by banks and financial institutions on a GCC-wide basis.