Bahrain fund industry assets surge in 2007

The number of funds registered with the CBB rose to 2,483 at the end of December 2007. The net asset value (NAV) of the registered funds totaled $15.6bn.

In comparison, the number of registered funds at 2006-end was 2,199, with assets under management totaling $9bn.

"The growth during 2007 was across-the-board, in funds investing in the region, overseas and in Islamic products," said Mr. Mohammed Ayman Al Tajer, Director, Financial Institutions Supervision, at the CBB.

Of the total assets of the fund industry, assets of foreign funds registered in Bahrain for sale rose 75% to $11.1bn in 2007, compared with $6.3bn in 2006. The number of such funds totaled 2,360 in 2007, compared with 2,102 the previous year.

The Islamic fund industry grew by 78.5% to $1.3bn, invested through 87 funds, compared with $750m and 80 funds in 2006.


The investible assets of Bahrain-domiciled funds rose 66% to $4.5bn in 2007, up from $2.7bn in 2006. The number of such funds surged by 28% to 124 in 2007, from 97 the previous year.

"The growth in funds domiciled in Bahrain, in particular, coincides with unprecedented volatility in international financial markets," said Mr. Al Tajer.

In contrast, the GCC region is enjoying unprecedented levels of economic growth. The vast majority of funds domiciled in Bahrain are invested in the region, he noted.

"The region is attracting both Arab and international investors looking for portfolio diversification and fund managers have been quick to recognize the regional investment opportunities," said Mr. Al Tajer.

Buoyed by strong investor demand, both conventional and Islamic investment funds are proliferating, with product offerings becoming increasingly diverse to include equity, bonds, commodity, private equity, real estate and Ijara (leasing) funds.

In 2007, the CBB introduced a new, updated regulatory framework for the fund industry, which includes Bahrain's first-ever rules allowing collective investment undertakings (CIUs) targeting professional investors. The rules provide for the registration of 'Exempt' CIU, which allows hedge funds and other higher risk alternative investment vehicles to be legally domiciled and/or sold in Bahrain.

"The CBB is fully supportive of the fund industry and our new regulatory environment is aimed at enabling fund sponsors/managers and service providers to capitalize on the opportunities that best serve investors' needs," said Mr. Al Tajer.