Islamic finance, future challenges (page 3 of 3)

"Offshore banks also subject to greater scrutiny. Only if a jurisdiction is pre-approved by the US might it get an easier ride. There is a low level of scrutiny for those jurisdictions recognized by the US as being subject to consolidated supervision," said Mr Winer but this is not the case for most countries in the Middle East.

A series of fund managers speaking at the International Islamic Finance Forum in Geneva collectively agreed that post September 11 no changes have been made in marketing their products. Nassif L Aoun, Division Head, Investment Services at National Commercial Bank confirmed that the bank's marketing strategy remains the same.

However, he did say that "we are more sympathetic with customers and more service oriented but long-term story, we always sold our funds based on a long term horizon and on meeting goals in the long term. A year or two of down markets does not change that."

Masood Aijazi, Consultant for Financial Investments at the Saudi Economic and Development Company (SEDCO) reiterated this sentiment. "There have been no major changes. We consider ourselves the educators. We have a tough time in explaining in 1998 that markets went down as well as up but our fund performance really helped us. In the last four months we gained more assets than in the past four years."

In that vein, Mr Aijazi said the time is right for investors to ponder their strategies and that this provides a key role for SEDCO. "We give them tools so they can understand what's happening and we always give them a long term view."

European SRI manager reported similar sentiments. Rene R Kamber, Head of Institutional Clients at Sustainable Asset Management, Switzerland, also played down the negative impacts. "Socially responsible companies in the long run will derive better value to their investments. We are reinforcing the message that now is a good time to look at SRI or Islamic investment."

Similarly, Michel Jacquemai, Partners, Hedge Fund Advisory, Partners Group, Switzerland confirmed that the company has not changed its marketing strategy. "In the 1990s an alternative investment strategy was difficult to market but now market disciplines have realized it's not a one way street especially with low correlated strategies. We will continue to try to add value."