IslamicFinance.de

With access to capital becoming more difficult, and valuations nose-diving across public markets, private equity firms are challenged to demonstrate the real value they bring to the investee companies, says Ashar Nazim, Director and Head of Islamic Financial Services at Ernst and Young.
Liquidity and credit surge during the past decade saw mushrooming of investment firms across emerging markets pursuing private equity business. Shari'a compliant investments especially remained in strong demand as investors sought to diversify risk and seek higher risk adjusted returns.
With access to capital becoming more difficult, and valuations nose-diving across public markets, private equity firms are challenged to demonstrate the real value they bring to the investee companies.
Empirical evidence suggests that investor appetite for alternative investment may be returning, and in the GCC and Far East specially, Shari'a compliance still remains a desirable feature for many of the mainstream investors. However, track record of private equity firms is the top deciding factor for most investors. Hence refocusing on creating value through operational excellence will be very important in the post crises era.