The multi-billion dollar investment manager is targeting high wealth individuals and sees further opportunities in developing more Islamic services.
London: Quilter Cheviot, an arm of UK-based multibillion dollar investment manager Quilter, has launched a new Sharia compliant wealth management product for high-net-worth individuals and institutional clients.
The new Sharia compliant discretionary investment service will offer portfolios to private clients and institutional investors with a minimum of $1 million of available capital. These portfolios will consist of a broad spread of global equities and can be held within a range of structures including trusts, companies, foundations, pensions and portfolio bonds.
Quilter Cheviot is primarily involved in structuring and managing discretionary portfolios for private clients, charities, trusts, pension funds and intermediaries. Its parent company, Quilter, manages around £27.7 billion ($37.3 billion) in funds.
Discretionary investment management is a form of investment management where buy and sell decisions are made by a portfolio manager or investment counsellor on behalf of a client.
This discretionary Sharia compliant portfolio service allows Quilter Cheviot’s specialist investment managers to tailor customers’ investment portfolios, according to Mark Leale, head of Dubai office and senior executive officer at Quilter Cheviot.
“The launch of this service is based on 12 months of groundwork,” he said. “The investments held in portfolios will be made into global equity markets and therefore customers will require a higher risk appetite.”
The service will be managed centrally by an investment team at the firm’s Jersey, UK office, utilising the expertise of their London research analysts. The service will initially be offered to clients in the Middle East and Africa via the firm’s Dubai International Finance Centre (DIFC) branch.
The investment team will work closely with London-based Sharia advisory firm Yasaar and its Sharia Supervisory Board. Majid Dawood, CEO of Yasaar, said that the Sharia audit will be done on a quarterly basis as well as on an annual basis.
“Our engagement with QC [Quilter Cheviot] will be very close so as to identify any issues that arise, [such as] whether a company falls out of Sharia compliance and will need to be monitored, there is a corporate event or such like that requires a review within the quarter as necessary,” said Dawood.
Growing Islamic wealth space
According to a recent report on 'Global Attitudes to Islamic Wealth Management' commissioned by Jersey Finance, 62% of respondents said they would always choose a Sharia compliant investment even if the performance was inferior to an equivalent conventional investment.
Faizal Bhana, director of Middle East, Africa and India at Jersey Finance, believes that the new Quilter Cheviot Sharia discretionary investment service highlights the increasing demand for Sharia-compliant products and services, particularly for the high and ultra-high net worth market segments.
“This product is designed to target the sophisticated investor,” he said. “Once this is rolled out successfully, it will open doors to other offerings by other providers for different types of investors, including those with smaller savings. These types of products help, not only with increasing awareness, but also to scale up the market in the private wealth space.”
Quilter Cheviot’s new discretionary service will join a small but growing number of asset and wealth managers offering Sharia compliant portfolios. Providers offering Sharia compliant discretionary investment services include TAM Asset Management, Lombard Odier Assayil and Simply Ethical.
Better education needed
Whilst the introduction of halal portfolios is positive, it is important for asset and wealth managers to ensure they communicate and educate the benefits of Sharia compliant portfolios as well as the differences to conventional investments.
“Whether if this is retail banks offering access to vanilla products, or family offices looking to inform the next generation, not only is there competitive advantage in educating clients on the benefits of investment, but there is also arguably a social responsibility to do so, particularly for the mass market segment,” said Thomas Woods, senior consultant, Wealth & Asset Management Consulting at Capco UK. “It will be interesting to see how firms approach this topic, particularly through harnessing digital channels.”
More products on the horizon
Depending on the success of this new investment service, Quilter Cheviot is also open to looking at launching other Islamic wealth management products and portfolios including at the lower end of investment scale, according to Leale.
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