How Bahrain-based GFH’s new $100 million sukuk fund aims to power economic growth in GCC nations

Bahrain-based GFH Financial Group's $100 million sukuk fund will support Islamic financial development agendas and contribute to the wider economic recovery of the GCC, says Salem Patel, the Head of Asset Management.

Patel is responsible for managing the bank’s proprietary assets as well as clients' investments in equity and fixed income funds. He is also a member of the bank’s Management Investment Committee and ALCO. He brings over 20 years of extensive local and international financial industry experience to the group having previously worked in the Financial Services Division with Accenture in London and prior to this as a Financial Analyst with LongView Partners, London. He began his career working in Equity Research at UBS and Societe Generale.

He holds several Directorships including Falcon Cement Company and Roebuck Asset Management. He graduated from the City University Business School in London with a BSc (Hons) in Business Studies specialising in finance and has obtained several certifications including: the Islamic Finance Qualification (IFQ) and the Securities and Futures Authorities Registered Representative (SFA). He has also passed all three levels of the Chartered Financial Analyst (CFA) programme and recently completed the Senior Executive Leadership Programme at Harvard Business School.

Khaleej Times spoke with Patel about how GFH’s new $100 (367) million sukuk fund would help financing in Gulf Cooperation Council (GCC) nations.

Edited excerpts from the interview:

How will GFH’s new $100 million sukuk fund help financing in GCC nations?

As economies in the region recover from the pandemic and continue to diversify away from hydrocarbons, increased liquidity will support investment projects across the region within various sectors. The GFH Sukuk Fund, which was launched following an agreement with Credit Suisse to provide attractive financing, will create a pocket of liquidity to help borrowers to fund their liquidity requirements. The fund is among several launched since the pandemic that will support Islamic finance development agendas and contribute to the wider economic recovery of the GCC.

How is GFH trying to generate higher returns through this new sukuk fund?

GFH is using a combination of strategies to provide a higher risk adjusted return for investors in the fund. Our aim is to generate an above average long-term investment return on a risk adjusted basis and a quarterly income distribution of around 6.5 per cent per annum for investors.

The fund will be actively managed to offer the investors the opportunity to gain attractive returns while optimising their investment risk profile through diversifying their holdings. Our strategies for securing a solid return include sukuk selection, portfolio optimisation, modest leverage, and duration management.

The fund will hold a diversified portfolio of sovereign, quasi sovereign, and high yield corporate sukuk and sukuk-related securities. The fund aims to hold a diversified portfolio of Sharia compliant yielding securities, especially fixed income instruments from various GCC countries and issuers.

How does the GFH Sukuk Fund aim to capitalise on post-Covid-19 pandemic economic growth and recovery?

As countries in the region implement their post-pandemic economic recovery strategies, we will see an increased demand for investment and financing to fund projects and stimulate growth.

This economic rebuilding is not just an opportunity for investment banks offering Sharia-compliant products and services to generate elevated returns for investors. It is a chance to support the region’s recovery and make an important contribution to projects that benefit communities. By providing funding to borrowers who wish to secure funding through the issuance of sukuk, our fund will play an important part in the growth and development of Bahrain and its neighbours.

GFH offers several Sharia-compliant products in different areas to meet our clients’ demands. All are fully compliant with Sharia principles and offer investors an exclusive opportunity to invest in accordance with Sharia principles.