April 10, 2018 / 6:00 AM / 4 months ago

La Française looks to build range of Islamic investment products

April 10 (Reuters) - France-based asset manager La Française said on Tuesday it launched its first sharia-compliant, separately managed account on behalf of a Kuwaiti client, as the firm plans a wider push into Islamic investment products.

The managed account is run by real estate investment arm La Française Forum Securities (LFFS), part of a growing number of specialized firms aiming to offer Islamic investment products.

La Française, majority owned by Credit Mutuel Nord Europe , held 66 billion euros in assets under management at the end of December.

With healthy interest from institutional investors, in particular private banks, the parent company is now considering launching an Islamic real estate open-ended fund, said Jana Sehnalova, managing director and portfolio manager at LFFS.

LFFS developed the screening methodology and benchmark for its managed account alongside IdealRatings.

The strategy involves investing in a concentrated portfolio of between 30 to 50 listed securities that are screened according to religious guidelines such as bans on tobacco, alcohol and gambling, in much the same way as socially responsible funds.

A proposed open-ended fund would likely use a Luxembourg domicile to offer several share classes, with a potential launch around September, said Gerardo Duplat, head of business development for the Middle East.

There are also plans to seek seed money for a fund that invests in sukuk, or Islamic bonds, to tap into investor appetite for high yield products, Duplat added.

The firm has worked on sharia-compliant investments since 2012, when it developed a direct real estate investment product for an institutional client from Kuwait seeking exposure to the European market. (Reporting by Bernardo Vizcaino; Editing by Amrutha Gayathri)

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