| Kippreport.com

Mutual Fund

July 13, 2012 4:30 by kippreport

A Kuwaiti bank ties up with a French asset management com­pany specializing in real estate to set up a real estate fund. A rare occurrence, but hardly a unique one. Add the word shari’a to it and the event becomes even more singular. And then keep the name of one of the partners, the Kuwaiti bank, in this case, a secret and it becomes particularly unique. This is ex­actly what has happened with Paris-based La Française’s first shari’a-compliant fund, which is also being claimed as the first of its kind in France.

Launched on March 23 this year, the fund has been introduced as a structured OPCI – collective real estate vehicle with simplified investment rules with leverage – dedicated to institutional investors, in­cluding an unnamed but one of the largest and leading Islamic corporate and invest­ment banks in the world, based in Kuwait.

The Kuwaiti bank prefers not to dis­close its name as “most of its global investment activities are done in low profile.” The fund is the chosen vehicle to lodge the office building located 91, boulevard Saint Michel, Paris 5e, pur­chased jointly with the Kuwaiti bank. “The office building is leased to France Telecom, with a 10-year contract. The building was sold by Foncière des Ré­gions for roughly EUR46 million. The acquisition was partially leveraged by way of a Murabaha loan (a Shari’a-compliant loan facility structure that is primarily comprised of principal plus a fixed-profit margin) with non-interest bearing outlay,” the company said in a statement recently.

Since 2010, La Française AM and the unnamed Islamic investment bank have been linked by a joint venture partnership for the sourcing and asset management of Shari’a-compliant core real estate proj­ects in France. Apparently, the Islamic bank considers the French market key to its global investment allocation and has decided to team up with “a local, high caliber and experienced French partner” – La Française AM – “to implement its proficient investment strategy”.

La Française AM is a multi-specialist asset manager with two core areas of ex­pertise – securities and real estate. Its as­sets under management, as of the end of last year, totaled EUR34.8 billion. It has more than 35 years’ experience in collec­tive real estate vehicles. It develops tax optimized solutions for accessing insti­tutional real estate vehicles domiciled in France, specifically for foreign investors.

The group also offers partnership agreements (joint ventures) for the selec­tion and investment in French sustainable or shari’a-compliant real estate property. La Française Real Estate Managers is the leading French unlisted real estate fund manager in terms of capitalization. It boasts of being active at every stage of the real estate chain, from research and prod­uct engineering to asset management.

Conspicuous by its absence, the inter­national real estate department manager of the invisible Kuwaiti Islamic bank has instead sent a quote for the media to di­gest and infer. “We are delighted to carry out our first partnership with well-known local player, La Française AM. This in­vestment represents the cornerstone for our future investments in French real es­tate. Our choice naturally settled on La Française AM, given their extensive and successful track record, as well as the fi­nancial solidity of their  group. 

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Tags: CEO of La Française Real Estate Managers, La Française AM, Marc Bertrand, mutual funds, Paris-based La Française’s first shari’a-compliant fund, Sharia, Shari’a-compliant core real estate proj­ects