LONDON, 28 August 2006 — Boosted by an AA rating assigned in July 2006 to its global equity funds by international rating agency, Standard & Poor’s, Oasis Group Holdings, one of South Africa’s fastest-growing asset management groups, is planning a major marketing drive in Saudi Arabia and the GCC countries for its Oasis family of equity, balanced and property funds.
Adam Ebrahim, CEO of Oasis Group, confirmed that the company has applied for a license to operate from the Dubai International Financial Centre (DIFC), which is expected to be issued within the next month, and is in the process of establishing a presence in Saudi Arabia through a tie-up with a local partner. Ebrahim could not identify the Saudi partner because negotiations with both the entity and with the Capital Markets Authority (CMA) in Riyadh are still ongoing.
Oasis, set up in 1997 and headquartered in Cape Town in South Africa, has currently $3.3 billion of assets under management, of which $700 million is managed separately under Shariah-compliant principles under the Oasis Crescent label to ensure that there is no co-mingling of funds.
On the global equities side are the Oasis Global Equity Fund, the Oasis Global Equity property Fund, and the Oasis Global Money Market Fund. On the Islamic side are the Oasis Crescent Global Equity Fund and the Oasis Crescent Global Property Equity Fund. The Group also has the domestic Oasis Crescent Equity Fund, which invests in South African equities and which has given a cumulative return on investment since inception of 784.6 percent. Even in a down market such as 2005 in South Africa, the fund had a 19.5 percent return compared with the 10 percent for the MSCI World Index.
The group has seven entities, six of which are incorporated and therefore regulated in South Africa and one in Dublin. Recently, Oasis also set up a joint venture with AMInvestment, a subsidiary of the Arab-Malaysian Banking Group in Kuala Lumpur, which has already launched a retail Islamic equity fund, the Oasis AMInvest Global Equity Fund, the first ringgit-denominated global equity fund to operate from onshore Malaysia.
The seed capital for the fund was $20 million but Adam Ebrahim projects that the fund size would swell to $200 million within the next year.
Oasis claims that it has launched the first Shariah-compliant REIT (akin to a global property unit trust) investing primarily in South African real estate assets, and its joint venture in Malaysia similarly launched a global Islamic REIT (real estate investment trust) in July 2006 in Malaysia. It will also be launching an institutional Islamic equity fund in Malaysia soon.
South East Asia, like the GCC region, is a major strategic market for Oasis. Ebrahim expects the business to grow “very nicely” in the ASEAN region over the next three years. Arab Malaysia, with its “footprints” in Brunei, Singapore and Indonesia, in many respects is an ideal strategic partner, with each side bringing their own strengths. Oasis prides itself particularly in the quality of its equity research and stock selection. Arab-Malaysia on the other hand brings capital, distribution and placement power and local knowledge.
Gulf investors, according to Oasis, are already playing a major role in the Group’s offshore offerings. In the wake of the AA rating by Standard & Poor’s, interest in Oasis family of Islamic funds especially has grown. “In South Africa, we have over 27,500 clients. We are now registering 800 new clients per month. We recently had our first $100m offshore client,” confirmed Adam Ebrahim.
Its offshore clients come from Saudi Arabia, the UAE, Malaysia, Switzerland, the UK and France. Ebrahim is confident that the group has one of the best Shariah advisory boards in the sector, especially to overcome local barriers to entry and lack of market awareness of Islamic financial products. “We needed to ensure that we had one of the best Shariah advisory boards. We have Sheikh Nizam Yaquby from the GCC; Dr. Daud Bakar from Malaysia; and Sheikh Yusuf Talal de Lorenzo from the US, a Muslim minority country. This has given us local credibility and enabled us to market our products from east to west. This has also contributed to Shariah standardization of Islamic investment funds,” he added.
Apart from performance (the Crescent Global Equity Fund outperformed its benchmark, the Dow Jones Global Islamic Market (DJIM) Index, in 2005 with a return of 13.7 percent compared with 10.1 percent), gulf investors, in a post 9/11 investment era, may have another reason to opt for the Oasis family of funds.
Whereas the DJIM funds and most other global Islamic equity funds have a huge overweighting on US stocks of up to 70 percent, the Oasis Global and Crescent funds has a greater weighting to European and Japanese stocks. In fact, US stocks only account for 35 percent.
