KUALA LUMPUR: Islamic finance practitioners should explore joint ventures and synergistic collaboration with established global brands in private equity and asset management industries, says Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.
He added this would be the most efficient way to move forward as local players had significant value proposition to make such alliances attractive to their foreign counterparts.
The potential of Islamic asset management could be gleaned from the size of the high net-worth individual market in West Asia, which grew 10.4 per cent in 2010, with total wealth increasing 12.5 per cent to US$1.7 trillion, he said at the opening of the Eighth Kuala Lumpur Islamic Finance Forum here yesterday.
The amount, Ahmad Husni said did not include the sizeable Muslim assets in South and Southeast Asia and the pool of wealth represented a significant opportunity for private wealth managers to grow syariah-compliant investment.
He added that the size of the consumer class in Organisation of Islamic Conference (OIC) countries had been generally insufficient to support a thriving retail industry.
“The critical mass is missing. If we want to expand Islamic finance, it has to be, for now, through wholesale banking or investment banking and not retail banking.
“The wealthy family offices, corporations and sovereigns within the OIC should be our target markets,” Ahmad Husni said.
The minister said private equity, worldwide, has raised US$184 billion via Islamic financing, so far this year.
Even though this was significantly lower than the US$680 billion raised in 2008, the continued economic growth in Asia would attract investment deal flows in both directions, from and into the west, he added. — Bernama