This Frost & Sullivan research service titled Islamic Asset Management Industry - Investment Analysis deals with the global Islamic asset management industry, with a brief focus on countries in the Gulf Cooperation Council (GCC) and related investment themes. The study also discusses major trends in the Islamic asset management industry and provides industry challenges and market drivers and restraints. In this research, Frost & Sullivan's expert analysts thoroughly examine the following: mutual funds, private equity, and venture capital.

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Market Overview

Islamic Asset Management Industry Moves beyond Borders and Religion

Islamic asset management is gaining interest among investors as an avenue for alternative investment. The focus is intensifying on new categories of Islamic product offerings such as hedge funds, fund of funds, index funds, and exchange traded funds. In the key Muslim countries, income levels are rising year-on-year and investors are crafting agile strategies to scale up wealth management. Growing awareness among investors about the benefits of asset diversification and their willingness to consider unconventional investment options are factors helping to boost Islamic fund assets. “Increasing Muslim population in the world and rising income levels in key Muslim countries are expected to lead the growth of the global Islamic asset management industry,” notes the analyst of this research service. “The Muslim population is expected to grow at an annual rate of 1.7 percent from 2000 to 2075.”

The Islamic asset management industry is challenged by a lack of depth in the GCC capital market, causing inefficiencies in portfolio management. Operational efficiency needs to be ramped up to attract institutional investors. Funds are also likely to be exposed to regulatory, political, legal, economic, and financial risk in cross-border investments. Efficient management of these risks is vital for keeping costs low and funds profitable. The Islamic fund industry is highly fragmented, and high management fees prevent the achievement of economies of scale. Proper audit controls must be established to ensure that investments have been done in line with Islamic principles and profits are made based on Islamic investing. Moreover, distribution channels must be expanded to reach out globally.

“Islamic finance is moving beyond the GCC region to other countries, such as India, the United Kingdom, the United States and so on.” says the analyst. “The list represents the major countries vying to become financial centers for Islamic funds.” Many of the existing Shariah indices are expanding to other regions, and country-based indices are being launched. New product development, innovation in the field of Islamic finance, and the expansion of the Islamic funds footprint will be major propelling forces for the growth of the Islamic asset management industry.

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• Islamic Asset Management Industry: GCC Private Equity Market (World), 2006 -2009
• Islamic Asset Management Industry: Sharia-compliant Private Equity and Venture Capital Funds (World), 2009
• Islamic Asset Management Industry: Net Assets By Asset Class (World), 2010 Q1
• Islamic Asset Management Industry: Top-ten Funds by Returns (World), 2010
• Islamic Asset Management Industry: Top-ten Funds by Global Geographic Mandate (World), 2010
• Islamic Asset Management Industry: Top-ten Funds by Sharpe Ratio (World), 2010
• Islamic Asset Management Industry: Top-ten Funds by Developed Markets Geographic Mandate (World), 2010
• Islamic Asset Management Industry: Top-ten Funds by Asia Pacific Geographic Mandate (World), 2010
• Islamic Asset Management Industry: Top-ten Funds by Middle East & Africa Geographic Mandate (World), 2010
• Islamic Asset Management Industry: Number of Funds (World), 2009 Q1 and 2010 Q1
• Islamic Asset Management Industry: Net Assets (World), 2010 Q1
• Islamic Asset Management Industry: Regulatory Overview (World), 2010

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