The cru Investment Management, a UK-based billion dollar investment company, has unveiled plans to launch an agri-backed shariah fund in the UAE and region focused on commercial agriculture in Africa.

The company said it will soon be promoting a new Islamic Africa Agriculture fund in the UAE, which is due to be launched in March next year.

cru is in the region to woo the UAE and the regional GCC investors and has set an ambitious target to raise over $13 billion over a number of years and have interests in many different sub-Saharan African countries. 

The fund, which will invest in commercial agriculture in Sub-Saharan Africa, has dual-purpose – to ensure returns in the range of 15-20 per cent, while the investment helps to create jobs and give rural Africans the chance to help themselves out of poverty.

Currently, cru has significant exposure to commercial agriculture in Malawi with over 2,500 hectares of land under its own control and another 4,000 hectares in outgrower schemes.

'In the backdrop of the global financial contagion, asset-backed real Islamic investments offers a better option to investors to safeguard their investments than the conventional equity mode,' said top cru official.

'The financial turmoil and the resultant steep fall in the value of conventional market instruments will speed up the pace of the growing affinity towards Islamic finance and real assets globally,' Jon Maguire, chairman, cru Investment Management, said.

'Investors have been burned by public markets in recent times. They are now looking for an asset class uncorrelated with conventional capital markets.'

'We believe that food is the new gold. It is emerging as a popular alternative asset class; especially in light of the global population estimates. Figures show that 80 per cent of the world’s population is set to urbanise by 2030 – if we don’t grow food, who will feed these people?'

He said that cru has positioned itself as an entity with focus on social investments and is currently in advance stages of offering an alternative investment instrument combining its ethical and transformational investment focus with Islamic finance.

“I have brought on board an Islamic Finance specialist, Naveen Raza, to head up our Islamic offering.  We will be promoting a new Islamic Africa Agriculture fund in the UAE, set for launch in March 2009.”

Raza, previously of HSBC Amanah, said, “I am delighted to be working on this new initiative. It is closer to the true ethos of Islamic finance than any other product on the market; combining excellent returns on capital with a focus on poverty alleviation and fairer distribution of wealth.'

'This is the future of Islamic finance and should have been its focus right from the start,' she opined.  

'Significantly, our fund comes at a time when current market conditions call for investment into real and tangible assets. One of the best places to put your money is into food production – prices are going up, population is increasing and mouths need to be fed,' she observed.

Raza poined out that Africa was fast emerging as a destination of choice, especially for Middle East investors, as was agriculture.

'Investors are looking to diversify their portfolios by geography and asset type – Africa is the last frontier,” she noted.

“In addition, investing in the fund will also support the various initiatives of the GCC governments to ensure food security at a time of inflation and shortages in the region,” she added.

According to the company’s estimates, the funds it raised through its existing Africa Invest Fund are financially engaging over 100,000 people in Malawi.

It is also supporting 2,000 vulnerables through feeding programmes where orphans, widows, AIDs victims and the elderly receive a nutritious porridge for free every day.

“We have been marketing this Fund in Europe for the last few months and received a very positive reaction to it, especially from ethical investors. I am now excited to see the response from Islamic investors; particularly those that want to stay true to the spirit of Shariah-based investing,” Raza added.-Tradearabia News Service