Shariah Capital is a U.S.-based company that creates and customizes Shariah compliant financial products and platforms and provides selective Shariah consulting and advisory services primarily to global financial institutions and investment firms with product initiatives directed to Islamic investors.
The company is best known for its pioneering efforts in Shariah compliant hedge funds. It developed a proprietary software engine for screening stocks electronically, devised a Shariah compliant, arboon-based short sale methodology, and modified prime brokerage documentation that led to the first Shariah compliant hedge fund and fund of hedge funds. Shariah Capital was awarded the prestigious Master of Islamic Funds Award in 2007 in the "Best Innovation/New in Islamic Funds" category and named "Best U.S. Islamic Financial Services Firm" in 2008 by Global Finance magazine. In 2011, World Finance magazine named Shariah Capital "Best Shariah Compliant Hedge Fund Service Provider."
Shariah Capital is publicly traded on the Alternative Investment Market (AIM) of the London Stock Exchange (trading symbol: SCAP.L). It reports to the Financial Services Authority (FSA) in the U.K. and its financial statements, audited by Rothstein Kass, are publicly disclosed. The company is incorporated and headquartered in the United States and operates a regional office in Dubai.
Shariah Capital's major shareholders include Eric Meyer, Chairman and CEO, the Dubai Multi Commodities Centre Authority (DMCCA), an agency of the Dubai government, and Investec Bank (U.K.), Ltd. London. Approximately 20% of Shariah Capital's shares are in the public float. In 2009, Mr. Meyer received the "Special Merit Award for Outstanding Industry Contribution" for his work developing Shariah compliant hedge funds and funds-of-funds.
Shariah Capital draws upon world-class Shariah scholars to form independent Shariah boards for many of its projects. Its affiliated scholars include Sheikh Nizam Yaquby (Bahrain), Dr. Mohd Daud Bakar (Malaysia), Dr. Mohammad Abdul Rahim Sultan Al Olama (UAE), and Dr. Yousef Abdullah Al-Shubaily (Saudi Arabia). Shariah Capital is a member of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). Sheikh Nizam, Dr. Daud, and Dr. Al Olama all are members of the AAOIFI Shariah Board.
In 2007, Shariah Capital jointly announced with Barclays Capital the development of the Al Safi Trust, a comprehensive Shariah compliant platform for alternative investments. Designed as a "one-stop" platform primarily for single strategy hedge funds, Al Safi provides Shariah screening and arboon-sale solutions along with prime brokerage, administration, and trustee oversight within a pre-established Cayman trust framework. The Al Safi Trust was named "Best Islamic Alternative Product" at the Hedge Funds World Middle East Conference in 2009.
In 2008, DMCCA purchased a 4.99% equity position in Shariah Capital. DMCCA's Chief Executive, Malcolm Wall Morris, currently serves on the company's board of directors. Later that year, Shariah Capital formed a joint venture, Dubai Shariah Asset Management (DSAM), with Dubai Commodity Asset Management (DCAM), a wholly-owned division of DMCCA. DCAM, an investment company licensed by the UAE Central Bank, develops and distributes Shariah compliant, commodity-linked investment products in the UAE. The first four hedge fund strategies were funded by DMCCA in 2008 and registered on the Al Safi Trust platform. Today, three funds are marketed under the "DSAM Kauthar" brand name and open for investment: DSAM Kauthar Gold Fund, DSAM Kauthar Energy Fund, and DSAM Kauthar Global Resources & Mining Fund.
The DSAM Kauthar funds have received numerous performance awards:
- Barclay Hedge, an independent hedge fund research organization with a database of over 5,800 hedge funds, has consistently ranked the DSAM Kauthar Gold Fund, Ltd. in its Top Ten of Metals & Mining hedge funds based on its monthly performance results throughout 2009, 2010, and 2011. In both 2010 and 2011, the DSAM Kauthar Gold Fund received the MENA Fund Manager Award for "Outstanding Performance and Innovation."
- The DSAM Kauthar Energy Fund was ranked among the Barclay Hedge Top Ten Energy Funds for its performance in February, 2011.