Saudi Arabia‘s Al Rajhi Group, a petrochemical-to-property conglomerate, is starting a shariah compliant $300-million Singapore-based fund that will invest in Asian property. The fund, a joint venture with a Singaporean investor Yusof Wahid, will start with an initial investment of $100 million, the family-owned Al Rajhi Group said in a statement. Al Rajhi will own 80 percent of the fund, with Wahid owning the remaining 20 percent.
Shariah bans the charging of interest, equating it with usery, and prohibits investment in businesses that deal in alcohol, pork, arms, gambling and pornography. A flood of petrodollars into financial markets on the back of high energy prices have spurred strong growth in Islamic finance markets, where assets are expected to hit $2 trillion from the current $900 million.