CIMB Standard Appointed Manager for US$500 Million ADB-IDB Fund

CIMB press release:

Kuala Lumpur: CIMB Standard, Asian private equity and infrastructure fund specialists, have been appointed manager and advisor to a new US$500 million Islamic Infrastructure Fund, jointly sponsored by the Asian Development Bank (ADB) and the Islamic Development Bank (IDB).

The Islamic Infrastructure Fund (IIF), Asia’s first major multi-country Islamic infrastructure fund, will make Shariah-compliant equity investments in emerging countries in Asia with significant infrastructure opportunities to meet their developmental needs. Amongst such countries are Bangladesh, Indonesia, Kazakhstan, Malaysia, Pakistan and other member countries common to both ADB and IDB. The IIF will receive an initial commitment of US$250 million from the joint Sponsors – ADB and IDB. The IIF will also help bridge the gap between Islamic investors who require Shariah-compliant products and project sponsors who need capital to build crucial infrastructure. The IIF will adopt a unique investment strategy and seeks to achieve a superior risk-return proposition for investors.

“As Asia seeks to claim a greater share of the world economic pie, heavy emphasis will be placed on its infrastructure development to facilitate sustainable economic growth. With demand for such investments estimated to exceed US$8 trillion in the coming decade, we are very confident about the appetite for this new fund” said CIMB Group Chief Executive, Dato’ Sri Nazir Razak at the launch of the fund. He added “The majority of private equity funds are focused on large markets such as China and India creating a gap which we intend to fulfil by leveraging on our expertise as a focused regional player”.

The CIMB Standard senior management team is ideally suited to lead this new initiative. The team includes private equity and infrastructure specialists with proven track records in the Asian region. The team’s ability has been demonstrated via CIMB Standard’s already successful private equity vehicle, The South East Asian Strategic Assets Fund (SEASAF), a US$150 million fund focusing on energy and infrastructure in the Southeast Asian region.

Nicholas Hamilton, Standard Bank’s Chief Executive of the Asia Pacific region said “Today’s launch of the IIF marks a significant milestone in our partnership with CIMB Group, which began in 2006, and is now a leading investor in Malaysia and Southeast Asia. As a recognised specialist emerging market bank, we are able to leverage on our global network to ensure long-term sustainability. Together with CIMB Group’s vast network and experience in Islamic banking, we firmly believe in the success of our joint venture.”

ADB’s Private Sector Operations Department, Director of Capital Markets & Financial Sector Division, Robert van Zweiten, said, “Infrastructure in many of the countries that are members of both ADB and IDB is less developed than the Asian average. We expect the fund to help channel investments into critical infrastructure projects in the region which will, in turn, will improve the prospects for economic growth and poverty reduction."

Meanwhile, IDB’s Director of Country Operations Department (Asia) Dr. Walid Abdelwahab, said that IDB expects the IIF to attract capital from the Islamic world, notably the Middle East. "There is still a substantial amount of wealth in that region and investors there are increasingly interested in putting their money to work in a way that complies with their faith."

The two development banks announced the prospective launch of the IIF during the annual meeting of IDB’s board of governors in Ashgabad, Turkmenistan recently.


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