Amwal Capital Partners, an independent investment firm, has announced its Shariah-compliant financing fund’s launch and first closing.
The Fund is created to meet the increasing demand from investors for Shariah-compliant financing options.
It also aims to provide flexible capital to small and medium-sized businesses that still face challenges due to a lack of services from regional banks.
The newly launched $150 million ACP Islamic Finance Fund will fund startups in various industries, especially those focusing on asset-backed solutions for technology platforms.
The IMF also plans to take advantage of direct lending opportunities, aiming for 12 to 15 deals over the next five years, mainly in Saudi Arabia and the UAE.
Sherif Eid, Partner and Co-Chairman of Amal Capital Partners’ Fixed Income Division, said that regional private credit offers a great opportunity to achieve returns similar to equity returns through well-structured, low-risk investments with high guarantees.
Lending to small and medium-sized businesses (SMEs) in the GCC is still limited, with SME loans making up less than 10% of total loans, compared to over 20% in developed countries. The credit gap for SMEs in the region is estimated to be $250 billion.
Fadi Arbeed, co-founder and CEO of Investment at Amwal Capital Partners, says that private credit is a great investment opportunity in the region. He explains that there is a big gap in funding for small businesses, as the supply of money doesn’t match the real needs of the economy.
To solve this problem, their Fund focuses on providing Shariah-compliant financing, which is often overlooked by traditional lending channels.
Amwal Capital Partners announced a solid ACP Islamic Finance Fund investment plan. They focus on areas like logistics, vehicle leasing, and financial technology, with the investments expected to last three to four years.
The Fund is starting two projects focused on the growing tourism industry in the GCC and the important agri-food trade sector. It is also working on several other investment deals and expects to finish two to four more this year.
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