PineBridge, a global asset manager with $71.4 billion in assets under management, announced it has reached a first close on a rare sharia-compliant real estate fund.
PineBridge GCC Real Estate Fund has so far raised $140 million of its $200 million target, according to a statement from Pinebridge today.
It is PineBridge’s first sharia-compliant fund and will invest in existing properties in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. It will focus on warehousing, healthcare, education, and retail properties.
A spokeswoman for Pinebridge said that the firm had seen “definite investor demand for sharia compliant” products and that investors include sovereign wealth funds and financial institutions.
Before the financial crisis and the Arab Spring, Sharia funds had long been expected to surge on the back of appetite among oil-rich Middle Eastern investors. But despite greater understanding of their structure among private equity firms and investors, interest in these funds has dwindled over the past five years.
On average around $900 million has been raised every year since 2009 by Sharia compliant funds, according to data provider Preqin. Before the onset of the financial crisis, interest in sharia funds had been on the rise, with private equity firms raising $5.6 billion of capital through six such funds in 2006 alone.
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