CAIRO (Reuters) - Cairo-based Ridge Islamic Capital said on Wednesday it has $100 million to raise its capital and invest in funds over the next two years to tap a growing market for Islamic finance.
The firm was launched on Wednesday after Dubai-based regional investment company Ridge Solutions International Holdings, which is providing the $100 million, acquired Egyptian investment banking and asset management firm El Rashad.
El Rashad operated on conventional financial lines but Ridge said assets that it managed would now be converted to be sharia compliant, according to a timeline set by a sharia compliancy board, likely to be about two years. Future investments would all meet Islamic principles.
“With a population that exceeds 83 million and the government-set target to increase Islamic and Sharia compliant finance, Egypt represents an attractive proposition for us to present and differentiate our products from modern and traditional Islamic banking,” Miguel Henriques, chief executive of Ridge Solutions, said in a statement.
The parent company for the Ridge group of companies, Ridge Solutions Group, is based in Angola. 䈀
The Egyptian firm now has paid-in capital of 22.5 million Egyptian pounds, and manages a fund and portfolio investments worth about 20 million pounds in total.
“We are going to increase it (the capital). We don’t know yet by how much because we are bringing in $100 million and we are going to put that $100 million either into capital or in funds that we are establishing here,” he said at the launch.
He added that this decision would depend on how best it could leverage its investment and attract other investors.
One of the first initiatives by Ridge Islamic Capital is to set up a $150 million Islamic fund of funds, possibly for launch by the end of this year or the start of 2013, covering the Middle East and North Africa.
Henriques said Cairo would be the base to expand into the Middle East and North Africa. In Egypt, where an Islamist president now rules, he noted opportunities in real estate.
Officials from Egypt’s Islamist Freedom and Justice Party have said they aim to boost the market share of Islamic banks in Egypt to 35 percent in five years from roughly 5 percent now. They say they will do this by increasing the total size of the banking sector, not by penalising conventional banks.
The FJP is the political party of the Muslim Brotherhood, the group the propelled President Mohamed Mursi to power after the overthrow last year of Hosni Mubarak, whose govermment neglected or discouraged Islamic finance.