* New real estate or private equity investments lined up
* Sees wealthy Muslims as untapped market
* Sees “vintage years” for Sharia-friendly asset classes
By Cecilia Valente
LONDON, Nov 4 (Reuters) - The European unit of Bahraini Islamic lender Al Salam SSUD.DU is considering real estate and private equity investments that could complete by January.
“We would hope to have something else for the market before year-end,” Mohammed Paracha, CEO of Al Salam Europe Ltd, told Reuters on the sidelines of a conference on Wednesday.
In June, Al Salam acquired the Milton Gate office tower in London from UBS Triton Fund in a deal worth more than $220 million. Paracha declined to elaborate on the structure of the latest intended deals or their size.
Real estate and private equity are seen as the mainstream asset classes most appropriate to the principles of Islam, which encourage a split of risk and rewards between investors and entrepreneurs as well as the use of tangible assets.
“The way in which asset valuations have come down creates very good opportunities and it is my firm belief that if you invest in the next one or two years, in four or five years you will be exiting at better valuations,” he said.
“When we talk about vintage years or golden years in terms of investment, we are saying that everything is right in terms of the key valuations and trends,” Paracha said.
He told delegates at the International Real Estate Finance Summit 2009 the credit crunch had helped create a level playing field between mainstream investors and their Islamic peers, boosting relative assets levels.
Investors in Sharia-compliant products are barred from investing in most financial stocks and are be less exposed to derivatives or the kind of toxic assets which sparked the steepest losses during the credit crisis.
Paracha thinks Islamic banks need to be shrewd about tapping new opportunities, including targeting wealthy Muslims. “We should not forget that there are markets out there that have not yet been tapped and one of the markets is Muslim high-net-worth individuals, not just in this country,” he said.
He said there are 10,000 Muslim millionaires in the UK alone. “I am positive that there is market, these people need to be offered products. All the Islamic banks in London are all there to do Islamic banking but we still do not have a way to target these people,” he said.
At the end of September Al Salam Bank had 667 million Bahraini dinar ($1.8 billion) under management. (Reporting by Cecilia Valente; Editing by David Holmes) ($1=.3770 Bahraini dinar)