Financial Standard

#Australia should consider Islamic finance to bridge infrastructure gap

According to Crescent Wealth managing director Talal Yassine, Australia should consider Islamic finance to bridge its infrastructure gap. In his opinion, if super funds continue to spurn local infrastructure investment in favour of offshore assets, Islamic finance could provide a solution. Australians who think it may be hard to source Islamic debt need only look at the UK, which in 2014 became the first Western country to issue sukuk. Yassine believes that the Australian Government is equally well placed to issue sukuks. Local financial institutions, such as National Australia Bank and Crescent Wealth have expertise in building compliant Islamic debt structures and could be used in these funding initiatives.

Australian Islamic finance presents opportunities

Less than one per cent of investment products in Australia are Shariah compliant, suggesting huge opportunities for fund managers in this segment. The Muslim Community Co-operative Australia (MCCA) manages a Shariah compliant property income fund which has just surpassed $30 million in assets under management. MCCA chairman Dr. Akhtar Kalam said this growth shows strong support for IBF products within Australia. MCCA is also reported to be in advanced discussions with an unnamed Middle Eastern company with a view to setting up a $180 million mortgage fund, a $150 million property fund, a $180 million Sukuk fund and a $5 million asset-leasing fund. Kalam said that this deal could signal the start of an exciting growth story driven by overseas interest in investment in Australia.

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