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SEDCO Newsletter Quarter 4, 2015
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  photo   SEDCO CAPITAL CIO: SHARIAH-COMPLIANT AND ETHICAL INVESTMENT IS THE SOLUTION

SEDCO Capital CIO Bernard Caralp spoke with Rob Langston of Mena Fund Manager about the firm’s approach to investment and how it has weathered recent market challenges. The steady growth of assets into Islamic funds and interest in Shariah-compliant strategies has been one of the key trends for the region’s asset managers in recent years. Greater awareness by investors and solid performance have seen inflows increase.

One firm that has taken advantage of the growing interest in Shariah-compliant and ethical approach to investment is SEDCO Capital. Since being founded in 2010, the firm has established itself as one of the leading asset managers in Saudi Arabia. The boutique asset manager, led by CEO Hasan Al-Jabri and part of the SEDCO (Saudi Economic and Development Company) Holding group, has accrued AuM of $4.5bn.

CIO Bernard Caralp said its Shariah-compliant and ethical investment style, coupled with its broad product range, gives the firm a “competitive advantage” over its asset management peers. Caralp also highlighted its ethical credentials, noting it was the first Saudi firm to sign up to the United Nations Principle of Responsible Investment (UNPRI) guidelines in July 2014.

Caralp said the firm’s Shariah-compliant and ethical investment approach can be seen in its attitude to leverage, avoiding heavily indebted companies. The SEDCO Capital CIO also stated that its approach to leverage proved to be a good hedge during the global financial crisis and could be effective again given the higher levels of volatility seen in markets more recently.

Caralp said the convergence of the Shariah-compliant and ethical investment is becoming easier, as both strategies often draw from a similar universe of companies and assets. The combined assets for the two investment styles is also likely to make ethical/Shariah-compliant strategies much more influential in the asset management industry. Finance is only here to support the development of the society and not to destroy the value of the society.

The decision by Chinese authorities to devalue the yuan and to prop up its flagging stock market during the summer had a big impact on the region as investors pulled out of emerging markets, fearing a slowdown in one of the world’s largest economies.