(MENAFN Press) Jeddah, Saudi Arabia - Wednesday, December 5th 2012
Sidra Capital (Sidra), a Saudi Arabia Capital Market Authority (CMA) regulated Shariah compliant financial services company based in Saudi Arabia and INOKS Capital SA (INOKS), an alternative investment house specialised in commodities financing in emerging markets and regulated by the Swiss Financial Market Supervisory Authority (FINMA) recently announced investments in various transactions by its jointly managed Sidra Ancile Global Structured Trade Finance Fund (STFIF) totalling 13.5 million.
STFIF, which was regulated under both the CMA and the Commission de Surveillance du Secteur Financier (CSSF) of Luxembourg closed its first offering of subscription in September 2012 and have since approved investments in various transactions for its current assets under management.
A total of 13.0 million was already invested in a couple of syndicated transactions, amongst other to finance the production of seed cotton and cotton lint for the export market which were originated from Burkina Faso and Ghana via the Islamic structure of Istis'na. In both transactions, Sidra acted as the Investment and Shari'ah Advisor whilst INOKS was the Investment Manager. The other transactions were importation of poultry into GCC from Brazil and global trading (origination and distribution) of rice and coal. The investments in both transactions were also made Islamically, namely Murabaha or Mudaraba or a combination of both structures.
Hani Othman Baothman, MD & CEO of Sidra commented, "This fund is unique in every sense and is the first to be offered in the KSA. It targets to invest in the investment space, which was left underserved by larger mainstream banks for various reasons including recapitalisation exercise and higher capital charge for such transaction under the BASEL III requirements. We saw the opportunity and we capitalised on it through this fund, which is managed jointly by our partner, INOKS. We look to gradually increase our asset under management in the coming years."
The fund targets to focus in the emerging market for its investment activities.
Nabil M. Abdul-Massih, MD of INOKS couldn't agree more with the view that the arduous banking restructuring environment is not only exponentially but sustainably generating very supportive conditions for the strategy: "BASEL III concerns aside, the sector has traditionally been underinvested for lack of know-how and due to the management costs wrongly assimilated with servicing SMEs' financing requirements. This neglect finds no economical justification but is solely resulting from the structural inefficiencies that banks have with understanding the SMEs businesses' needs and dynamics and subsequently, to meet them with the proper and tailored financing solutions. As we see it, there is a perfect natural match between Islamic commodity financing structures' requirements and the way one shall approach providing solutions to growing SMEs in emerging markets". Further reaffirming the crying need of proper growth financing for non-speculative firms active in the commodity value chains, he commented that "the strategy allows investors to profit from efficiently providing to real tangible commodities based businesses the fuel required to purposely and successfully feed their short term and midterm growths".