Prestige Funds Islamic Impact Investment Fund seeded by Middle Eastern investor
Prestige Funds, one of the leading specialist private debt investment managers in the UK, has received seed investment for the ‘Premium Alziraea Fund’, a Shariah-compliant real assets and project financing fund targeted at the renewables and agriculture sector in the UK. This marks Prestige Funds’ first venture in the Islamic investments market.
The Premium Alziraea Fund will target capital appreciation of 5-7% per annum (net) with target annualised volatility of 1% and will operate without using leverage or performance fees.
Prestige has retained Dubai based, Kroma Capital Partners, a DIFC based, DFSA regulated company with a 3C licence, as its Middle East & Swiss Distribution Partner. Kroma Capital Partners has been instrumental in raising the seed investment for the Premium Alziraea Fund. Prestige has worked with the Principals of Kroma Capital Partners since 2009.
The Fund’s Shariah advisor is Sheikh Dr. Mohamed Ali Elgari, former Professor of Islamic Economics and a former director of the Center for Research in Islamic Economics at King Abdulaziz University, Jeddah, Saudi Arabia. He is a member of numerous Shariah Boards of Islamic banks and Takaful companies worldwide.
Intesa Sanapaolo Private Bank (Suisse) Morval SA has been the Islamic finance/arranger for the Premium Alziraea Fund.
The new Cayman Islands-domiciled Fund will invest in a diversified portfolio of secured asset and project-based finance projects many of which may be or are backed by the UK government. The Fund’s strategy has a low correlation to equity, bond or commodity markets.
The Fund will be investing across a broad portfolio of projects and small businesses with a focus on UK agricultural, horticultural and rural small businesses which have historically operated with lower defaults than other sectors. It has been designed to meet the requirements of allocators seeking Shariah investments with impact characteristics. It complies with established Shariah finance principles.
The Fund will operate as an open-ended Islamic finance vehicle although it will have a one year lock up and monthly/quarterly liquidity on 90-180 days dependant on the share class. The Fund will be aimed at Islamic institutional investors looking to diversify their investment portfolios and will be available in accumulation and distribution share classes in GBP / USD / EUR currencies. The target asset raise in year one will be US$ 50-75m, although the current investible opportunity pipeline stands at £500-700m / US$ 685-960m over the next 1-3 years.
The Premium Alziraea Fund will follow a similar project / financing investment strategy managed by Prestige Fund Management, a Cayman based Fund Manager, which has generated positive, consistent, uncorrelated returns for more than 13 years and has approximately US$ 500m of assets under management and the wider group strategy has approximately US$ 900m of assets. The underlying portfolio has been screened to meet the criteria required for Islamic investments.
The Premium Alziraea Fund leverages the combined expertise of both the Prestige group and the considerable team of rural infrastructure financing experts at Prestige’s dedicated, specialist Finance Arranger – Privilege Finance.
Based in Cambridge, England, Privilege draws on a team of almost 60 people with extensive commercial banking backgrounds and represents a considerable centre of expertise for agricultural / renewable energy and waste to energy financing.
Privilege already backs one of the largest portfolios of on-farm clean energy projects in the UK in what is a small and specialist financing market. It is recognised as an expert in the field of bringing biogas projects online and is an active member of the UK Anaerobic Digestion and Biogas Association. The company celebrated its 20th birthday last year and has a proud track record of lending to businesses in the agricultural sector in the UK.
“Premium Alziraea is our first Islamic – Impact financing product and is targeting an exceptionally important part of the UK economy at a critical time in its ongoing development,” commented
Craig Reeves, founder of the Prestige Group. “Our portfolios often finance landowners who are taking food, farm and animal waste and turning it into bio-gas and electricity, projects in turn supported by the UK government. The ethical criteria embraced by this approach makes the strategy ideal for Shariah funds, with their emphasis on responsible stewardship.”