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From Matthias Knab: In yesterday's article The 4th GCC Oil Boom (2002 - ????) Part 4: Will Islamic Finance create a new financial order? - Islamic Hedge Funds: Best of two worlds - The sky is the limit I pointed out that there are several groups of buyers for Islam compliant investments, including retail and HNI, private banks serving Muslim clients and corporations like insurers and corporate treasuries. A considerable, growing number of these investors state clearly that Islam compliant investments is what they are looking for, some even exclude other investments (see here for the previous article: Source)

Challenges in Creating Islamic Hedge Funds

Product developers at Islamic banks are bullish on the prospects of Islamic hedge funds, believing that "a marriage of the two will be best of both worlds", according to Masood Aijazi, CPA, CFA, and Senior Product Development Manager of Saudi Arabia's NCB Capital. However, as Islamic Finance has a totally different paradigm on even some of the most basic concepts of Western finance (like interest, or the concept of risk), major obstacles arise in the attempt to marry those two worlds. Aijazi thinks these challenges, which we will discuss here in detail, can be overcome.

At present, (Western) financiers and "financial engineers" view Sharia as an obstacle (or inhibitor), which has to be circumvented. On the other sid......................

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