DUBAI (Reuters) - Private equity will be a key growth engine for the Islamic finance industry, but fund managers need to better understand Sharia concepts before a market can develop, a top banker said on Wednesday.
Like most parts of the world, the private equity market in the Middle East came to a standstill in 2009 as liquidity conditions and deal opportunities dried up.
“Private equity is going to be a big boom area,” said Harris Irfan, head of Islamic Products at Barclays Capital, speaking at the Reuters Islamic Banking and Finance Summit.
“The capabilities of producing sharia- compliant private equity funds are actually very limited in the market despite the fact that people talk about private equity and Islamic finance as a natural fit.”
Irfan said he hopes to see private equity fund managers get comfortable with sharia concepts to create a space for such funds to operate in.
“The reality is executing a sharia-compliant private equity fund is very different from visualizing it.”
State-owned Abu Dhabi Invest AD said in October it was planning an Islamic private equity fund.
Reporting by Rachna Uppal, Nicolas Parasie, Shaheen Pasha, Amran Abocar; Editing by Rupert Winchester