The Hedge Fund Law Report

The definitive source of actionable intelligence on hedge fund law and regulation

Articles By Topic

By Topic: Islamic Finance

  • From Vol. 7 No.41 (Oct. 30, 2014)

    K&L Gates Partners Offer Practical Guidance for Hedge Fund Managers on Raising Capital in Australia, the Middle East and Asia

    Pension funds and sovereign wealth funds are important potential sources of capital for hedge fund managers.  Australia and Japan have about $1.7 trillion and $1.2 trillion in pension assets, respectively, while the sovereign wealth funds of Middle East nations hold another $1.8 trillion.  The Chinese market has huge potential as well.  In that regard, a recent presentation by international law firm K&L Gates LLP offered a comprehensive overview of the regulatory regimes and marketing requirements that affect fund managers seeking capital in Australia, the Middle East, Japan, China, Hong Kong and Singapore.  The program was moderated by K&L Gates partner Cary J. Meer.  The other speakers were her partners Natalie R. Boyd, Elizabeth A. Gray, Betsy-Ann Howe, Tsuguhito Omagari and Choo Lye Tan.  For a similar global regulatory roundup, see “KPMG Report Highlights Key Developments in Hedge Fund Regulation in the Americas, the Asia-Pacific Region, Europe, South Africa and the Middle East,” The Hedge Fund Law Report, Vol. 7, No. 33 (Sep. 4, 2014).  For a discussion of regional “passport” initiatives that may facilitate marketing of funds in Asia and Australia, see “How Can U.S. Hedge Fund Managers Use Passport and Mutual Recognition Initiatives to Market to Investors in Asia?,” The Hedge Fund Law Report, Vol. 7, No. 27 (Jul. 18, 2014).

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  • From Vol. 4 No.33 (Sep. 22, 2011)

    The “New-Age” Sukuk Market: How Investors Can Profit While Safeguarding Against Legal Risk

    Financial products compatible with traditional Islamic, or Shari’ah, law are becoming increasingly prevalent in the global marketplace.  Sukuk – or asset-backed, stable income, tradable and Shari’ah compatible trust certificates – are the most common of these Islamic financial products.  Recent developments in Europe and the United States suggest that the market for Sukuk is growing.  Economists predict a record $31 billion in Sukuk to be issued this year alone.  Britain will issue its first ever Sukuk this month.  Despite the growing market for these products, investors must remain cautious.  Even the savviest buyer should be aware of the legal risks and uncertainties inherent in these financial products.  The lack of a uniform, global regulatory system, varying levels of institutional transparency and inconsistent interpretations of Shari’ah law across different jurisdictions are among the many risks that may render a Sukuk null and void.  In a guest article, Carlos F. Gonzalez and Sumeet H. Chugani, partner and associate, respectively at Diaz, Reus & Targ, LLP, analyze: the five basic tenets of Shari’ah law; relevant profit and loss sharing concepts; partnership contracts as used in this context; the relevance of local law, bankruptcy and cultural considerations; and other issues relevant to participation by hedge fund managers and other investors in the Sukuk market.

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