Kuwait investment firm closes real estate fund

August 11th, 2008 - 8:40 pm ICT by IANS  


Dubai, Aug 11 (IANS) Kuwaiti firm Global Investment House (GIH) Monday announced that it was closing its ‘Global Real Estate Leasing Fund for the Middle East and North Africa (MENA)’ to finalise funding with the aim of securing better returns for investors through Islamic finance-compliant operations. In a statement issued from Kuwait, GIH said the fund, launched in July 2007, was aimed at providing annual income of 8-10 percent to current unit holders, according to the state-run Kuwait News Agency (KUNA).

The fund recently finished two “lucrative” transactions at 40 percent of the capital, GIH said.

According to Shailesh Dash, GIH’s head of alternative investments, the fund was met favourably in the region and in the Far East and wrapped at a total capital commitment at $75.4 million.

GIH vice-president and head of real estate funds Rakesh Patnaik said this was the right time to invest in this fast growing sector.

The company sought the opportunity and set up a strong base for flow of deals, he added.

The new fund will invest $15 million over 30 months within the Islamic ‘Musharaka’ trade system. In Islamic financing, Musharaka means partnership. It involves placing one’s capital with another person and both sharing the risk and reward.

The difference between Musharaka arrangements and normal banking is that one can set any kind of profit sharing ratio, but losses must be proportionate to the amount invested.

The GIH fund aims at an annual return of 12 percent, Patnaik said, and has representation at the GIH’s board of directors.

GIH manages over 38 investment funds of different strategies around the world and many realized profits that surpassed Kuwait Stock Exchange expectations and figures. Some were also awarded international prizes and high ranking.

Incorporated in 1998, GIH falls under the regulation of the Central Bank of Kuwait.

Today, GIH stock lists on the Kuwait, Bahrain, and Dubai bourses, with branches and affiliates in Bahrain, Dubai and Abu Dhabi in the UAE, and Jordan, Qatar and Sudan.

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