Islamic finance is a way of performing financial and banking transactions while respecting Islamic or ‘Sharia’ law, which is derived from both the Qur’an and the rulings of Islamic scholars. In recent years, the global financial market has witnessed an increased appetite for Sharia-compliant investment structures and financial products have become increasingly sophisticated as a result.
There are numerous techniques to achieve Sharia-compliant investments, all of which have at their core an interest-free component. In many cases, the goal is to allow Sharia investors to indirectly invest into a traditional/Western target fund (e.g. real estate or private equity) in a manner that complies with Sharia principles while also treating the investor, from an economic perspective, as if they were a direct investor in the fund.
In our new factsheet, we provide an illustrative case study example of how such a structure can work. We also dive into how a commodity Murabaha agreement works, as well as highlighting a number of other important considerations. Click below to view and download our factsheet:
Introduction to Islamic finance
If you’d like to know more about our specialist Islamic finance expertise and support for Sharia-compliant structures, please contact our expert team today:
