Today (13 January), Luxembourg ranks fifth worldwide by number of Shari'ah-compliant funds and the number of Middle East-based managers launching investment funds in Luxembourg has increased constantly. There are 41 regulated Shari'ah-compliant investment funds domiciled in Luxembourg and total Assets under Management in Shari'ah-compliant funds are estimated at $5.3 billion.
As such four Luxembourg-based companies are now joining forces to create a specialised platform that will service Shariah-compliant investment funds. Amanie Advisors , ADEPA Asset Management, Theisen Law, and KBL European Private Bankers have launched a service that will be branded ALIF (Alliance for Luxembourg Islamic Finance), offering fund managers a service to have their custodianship and fund servicing carried out in a Shariah-compliant manner.
Specifically assets will be held in segregated pools and prohibited from being used for short-selling or as security for interest-based lending, two activities prohibited under Islamic law. ALIF aims to compete on price and service in order to take advantage of the growing number of such funds in the market.