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Islamic Funds Find Safe Haven in London

LONDON-As Middle Eastern investors withdraw their funds from the USA, more are looking to Europe as a safe haven for their money. A Bahrain-based bank has launched the UK's first Shari'ah-compliant property fund aimed specifically at Middle Eastern investors.

By Graham Parker | Updated on October 22, 2002

LONDON-The £41.7 million ($64 million) purchase of a new office building near London Gatwick Airport by the Bahrain-based Gulf Finance House could signal a new wave of Middle Eastern investment in the UK and Europe. According to reports in the Financial Times quoting the Council on Foreign Relations, growing tensions between Saudi Arabia and US combined with calls from politicians to freeze the US assets of Middle East nationals has seen more than £130 billion ($200 billion) withdrawn from the US.

In a prepared statement the Gulf Finance House said it plans to capitalise on this trend by launching the Gulf Atlantic Real Estate fund, which is structured to comply with the Islamic Shari’ah law’s strictures on usury. Despite this, it has been able to leverage its equity with the Nationwide Building Society, assembling a £200 million ($310 million) war chest.

GFH Partner Ahmed Al Qattan said: “The appetite for UK-European investment is very strong in the Gulf in the current climate of uncertainty over US stocks, which is why Gulf Atlantic was successful in raising the equity fund in a matter of weeks.”

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