BlackRock seeded by DMCC, joins Al Safi platform

The amount of DMCC's investment is $50m.

BlackRock, Inc., a global institutional investment manager with over $1.26 trillion assets under management, will manage the BlackRock Global Resources & Mining Fund on Al Safi.

BlackRock's Dan J. Rice III, CPA, Managing Director and Portfolio Manager, will direct the Fund's investments into companies engaged in the exploration, development and production of global resources. Mr. Rice has over 25 years of experience in the global resources and energy sectors. The Fund expects to place special emphasis on small cap companies with capitalizations from $25m to $2bn.

The BlackRock Global Resources & Mining Fund on Al Safi will be available to investors through the DSAM Kauthar Global Resources & Mining Fund, an exclusive feeder fund established by DMCC's joint venture with Shariah Capital. This joint venture, Dubai Shariah Asset Management (DSAM), develops and manages Shariah governed investment products focused on commodities. It distributes these products under the "DSAM Kauthar" brand name.

The addition of BlackRock means that the Shariah governed alternative investment strategies seeded by DMCC now available are:

DSAM Kauthar Gold Fund
DSAM Kauthar Energy Fund
DSAM Kauthar Natural Resources Fund
DSAM Kauthar Global Resources & Mining Fund

All four are feeder funds into subtrust accounts on the Al Safi Trust platform where Barclays Capital is the prime broker and custodian. All are open to investors on a monthly basis. A fifth fund, the DSAM Kauthar Commodity Fund, is an equally-weighted fund-of-funds comprised of the four DSAM Kauthar strategies. It is designed for investors who prefer a managed exposure to all four commodity strategies.

More significantly, the DSAM Kauthar Commodity Fund is the first fund of hedge funds successfully introduced to the Islamic investment market. The fund provides a managed allocation among the various component DSAM Kauthar strategies so investors maintain a balanced exposure to all commodity sectors. The fund-of-funds structure also provides a benchmark against which the performance of individual strategies can be measured, as well as the core of an index for tracking Shariah governed, commodity-linked hedge funds. DSAM expects the DSAM Kauthar Commodity Fund and subsequent funds-of-funds to become the basis of a broad, commodity-focused product line.

Speaking on behalf of the DMCC, Ahmed Bin Sulayem, Executive Chairman, said:

"Today's announcement is as exciting for the DMCC as it should be for all Islamic investors. As we work to bring Islamic Finance into the mainstream of global investing, it is gratifying to see an internationally-recognized financial institution like BlackRock accept our Shariah conditions and agree to manage this DSAM Kauthar fund. It confirms our commitment to bring Islamic investors the best investment managers while enforcing a strict discipline of Shariah."

Mr. Rice, based in BlackRock's Boston office, commented: "The Middle East is a fast-growing market with estimated investment assets of more than US$3 trillion. BlackRock has already made strong progress in the region building extensive relationships, and we are excited to further deepen our presence in this area. We look forward to partnering with the DMCC, creating an attractive platform of investment opportunities for the Islamic investor."

Eric Meyer, Chairman and CEO of Shariah Capital, added: "BlackRock's commitment to manage within Shariah, I believe, will prove to be a very positive turning point in the evolution of Islamic finance. BlackRock's inclusion on the Al Safi platform makes a statement - to the alternative investment market and to Islamic investors worldwide - that major investment management firms like BlackRock, utilizing the seamless screening tools and arboon-based solutions to conventional short selling that we've developed at Shariah Capital, can, indeed, accommodate Shariah. It makes the statement that these firms have the confidence to deliver the same competitive performance to Islamic investors that they've delivered to conventional investors through the inevitable ups and downs of investment cycles. At the same time, BlackRock's funding underscores Dubai's unwavering vision to make it a centre for Islamic alternative investments and reconfirms that, despite today's global economic turmoil, the country's key core projects, like DSAM, are moving forward."

Richard Ho, Head of Fund-Linked Derivatives at Barclays Capital, elaborated: "DMCC's provision of seed capital to another manager on Al Safi is a strong affirmation of the veracity of the platform's Shariah framework. Al Safi expands the Islamic product universe beyond long-only portfolios and provides mechanisms for risk management previously unavailable to Islamic investors. With reports of Islamic finance growing at rates of 15-20% per year, we expect the addition of more long-short strategies to the platform that can accommodate Shariah to meet this strong client demand."

Ian MacDonald of DMCC, Mr. Meyer and the managers of two existing Al Safi funds were featured speakers at the GAIM Middle East Global Alternative Investment Management Conference held over the last two days in Dubai at the Dubai International Convention Centre.

John Hathaway of Tocqueville Asset Management, portfolio manager of Al Safi's Tocqueville Gold Focus Fund (the exclusive investment of the DSAM Kauthar Gold Fund) addressed the conference about the recent volatility of gold prices and longer-term investment opportunities in precious metals.

Russell Lucas of Lucas Capital Management, co-portfolio manager of Al Safi's Lucas Energy Fund (the exclusive investment of the DSAM Kauthar Energy Fund) likewise discussed current investment strategies in oil and gas and the ease with which he is able to manage within Shariah.

Both managers met extensively in interviews with local and international media during the course of the conference.