Shariah Shipping Funds In The Works

A fortnight ago, we wrote about Safeena’s first vessel acquisition and shortly after, another Islamic shipping fund is about to make a splash. Cyprus listed SFS Group and Kuwait Finance House will be launching their shipping fund, Global Shariah Shipping Fund, with the aim to raise USD 150 million for the shipping assets.

The seven year fund has a focus on offshore support vessels and is looking for investors in Asia, the Middle East and Europe. Investors can expect a 7% return per annum with quarterly cash distributions. More importantly, the two sponsors will be putting money where their mouths are, by pledging to contribute at least 10% equity to the fund, up to a maximum of USD 15 million. The fund plans to leverage up to four times the total equity committed, assuming that banks are able to provide 80% debt financing.

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