Shariah compliant funds new source of shipping finance says industry expert

De Vries, who is also the CEO of NFC Shipping Funds, a joint venture between DVB Bank and Northern Navigation Group, was speaking ahead of his planned address at Middle East Money & Ships - the region's conference for maritime financiers, insurers, lawyers, banks and investors, being held at the Grand Hyatt Dubai from December 12-13, organised by international maritime publisher, Seatrade.

"Asset based investments like real estate, work well for Shariah compliant structures because of the Ijara lease concept which involves the bank acquiring the property, leasing it in return for rent and then transferring it to the lessee once all payments are made. It also works with shipping and aviation," he said.

He adds that there is a substantial need for equity in shipping for the years to come.

"Due the order book and depending on where the shipping markets are, the internal generated cash will reduce and the need for external equity will increase. Islamic banks have high liquidity levels of between 60-70% and they need to find profitable investment opportunities for the funds available."

However, de Vries highlights the main challenge for the Middle East in terms of maritime private equity funding is its high value.

"If their operations are linked to the Middle East in some cases political risks are also relevant. In general the main challenge today is trying to attract investors into buying already high valued shipping assets," he said

De Vries, is among a powerful Middle East Money & Ships speaker line-up. At the two-day event, he will be joined on the speaker platform by Robert Curt, Managing Director, Qatar Gas Transport Co.Ltd ; Richard Briggs, Partner, Hadef Al Dhahiri & Associates, Mohammad Souri, Chairman, National Iranian Tanker Co; Khamis Bu-Amim, Chairman, RECSO;Yusr Sultan, Director, Gulf Energy Maritime PJSC; David Fairnie, Maritime Director, Hart; Marcus Machin of Alislami Oceanic Shipping Company Ltd; Neil Miller, Head of Islamic Finance Group, Norton Rose, Andreas Vergottis, Research Director, Oceanic Hedge Fund, Tufton Oceanic Ltd; Javad Mosadeghi, CEO, Islamic P&I Club and Tony Rice, Head of Ship Finance, Denton Wilde Sapte and Dr Adil Sinjakli, Managing Partner, Sinjakli & Associates.

Middle East Money & Ships will run together with the second edition of the prestigious Dubai International Maritime Awards (DIMA). A gala presentation dinner will be held, at Grand Hyatt Dubai, for the top achievers in West and Central Asia.