(Corrects name of RiverCrossing CEO in sixth paragraph)
By Bernardo Vizcaino
April 28 London-based RiverCrossing Capital
Partners, a new Islamic investment firm, has launched its first
product, a U.S. real estate fund, as part of a plan to offer
non-traditional asset classes to institutional investors in the
The firm will develop asset-based funds with a non-cyclical
nature, a departure from other sharia-compliant real estate
funds which have focused on more traditional commercial and
residential properties that perform in line with the economic
cycle, chairman Mohammed Abdulmalik said.
"The dynamics of investment banking in the Gulf have been
evolving - investors are opening up to new ideas," Abdulmalik,
former chief executive of Bahrain Islamic lender Capivest, told
RiverCrossing's first fund will have a target investment
horizon of five years and focus on medical offices, self-storage
facilities and senior and student housing in the United States,
"The next product might be in a different geography or a
different asset class. We have capacity to launch two to three
funds every year."
The management-owned firm is headed by chief executive Asim
Zafar, former chief strategy officer of Bahrain's Arcapita Bank
. Arcapita emerged from Chapter 11 bankruptcy
protection in the United States last September after being hit
by the global financial crisis.
RiverCrossing aims to raise $45 million in the first tranche
of its Alternative Real Estate U.S. Fund this quarter, reaching
a total of $125 million with a second tranche in the next 12 to
18 months, Abdulmalik said.
The Cayman-domiciled fund was established in cooperation
with Texas-based Virtus Real Estate Capital, which has launched
35 real estate funds since 2003 acquiring a combined $2.3
billion worth of properties.
RiverCrossing plans to launch other funds through the same
co-investment approach, using London as a base to source fund
managers and conduct due diligence on them, Abdulmalik said.
The firm is also applying to open a branch in the Dubai
International Financial Centre.
The last few years have been difficult for Islamic funds
with 105 closures since 2011, a study by Lipper and Thomson
Reuters found, but investor interest is gradually returning.
Last year saw the highest number of Islamic fund launches in
four years and the lowest number of liquidations since 2007.
(Editing by Andrew Torchia)