Middle-East investors launch $500m Latin America fund

A trio of Middle Eastern investors have unveiled a Shariah-compliant real estate fund targeting Latin American property investments.

Bahrain-based Ithmaar Bank’s Ithmaar Development Company, Kuwait-based Al Safat Investment Company (ASIC) and Bahrain-based Arabian Ventures have launched a $500 million (€318 million) Shariah-compliant real estate fund to take advantage of the burgeoning Latin American real estate market. Shariah-compliant funds may not invest in businesses that, among other things, manufacture, sell or offer alcohol or pork; invest in gambling establishments; provide interest-based financial services; or invest in nightclubs or related investments.

The closed-end fund, which will have an initial term of five years, will invest in real estate assets in Latin America, focusing primarily on the markets of Brazil, Argentina, Colombia, Mexico, Ecuador, Venezuela, Chile and Costa Rica.

Over the past few years economic stability in Central and Latin America has resulted in “unprecedented growth” in the region’s real estate markets, Ithmaar Bank chairman, Khalid Abdulla-Janahi, said in a statement. “The robust development of capital markets in Mexico, Brazil, Argentina and Costa Rica has increased liquidity, a clear indicator of positive, economic progress,” he said.

With around a third of the population in Latin America under 20 years of age, the region has witnessed increasing demand for housing and real estate developments, the statement added. “Real estate development activity is gaining traction, although demand outstrips the supply,” commented Waleed Ahmad Al Sharhan, chairman of Al Safat Investment Company.

Al Safat Investment Company, based in Kuwait, is a Shariah-compliant, KSE-listed investment company which focuses on establishing, developing, and restructuring companies as well as investment banking, asset management, financial advisory services and private equity. Ithmaar Development Company, established by Ithmaar Bank in 2006, manages and develops real estate projects ranging including infrastructure, hospitality, medical facilities and commercial buildings.

Bahrain-based real estate investment company Arabian Ventures, founded in 2000 by chairman Mohamed Husain Ali Yateem and managing director Mishal Ahmed Abdulaziz Al Jarallah, invests in and develops real estate in Bahrain and emerging markets.