This book is the 1st English language contribution to the global Islamic finance literature which is focused solely on Islamic private equity. Given the success of conventional private equity players and their demise during the credit crisis, it is instructive for executives of all levels to see how Islamic private equity can assist their businesses while avoiding the faultlines that led to recent demise of the conventional private equity system.
Shariah-Compliant Private Equity, comprised of 10 chapters and 20 private equity case studies, is designed for the executive who wishes to access Shari'a-compliant private equity, launch a private equity fund, convert an existing fund into an Islamic equivalent, identify potential partners in the global private equity space, or simply to understand more about this type of private equity.
In a broad yet detailed sweep of Islamic private equity, this book answers critical questions about the current private equity industry:
The history of Islamic private equity and its relevance to the contemporary, post-crisis global economy.
The closeness of Islamic private equity and de-leveraged conventional private equity.
How to establish an Islamic private equity fund.
How one conducts due diligence in Islamic private equity (with sample document checklist and Shari'a screens).
What role Islamic private equity can play in fostering the environmental revolution.
How basic business issues like information technology and insurance play out in Islamic private equity firms.
How entrepreneurs craft business plans to appeal to the Shari'a-sensitive investor or investment firm.
The case studies in the book bring these questions, and their potential answers, to life. There are several case studies, both actual and potential, on connecting Middle Eastern private capital with promising opportunities in the Western World and emergent China, 'the Middle Kingdom.' By way of example, there is a case study on a new Islamic private equity firm focused on financial services worldwide, which was seeded by sovereign wealth funds, specialist investment vehicles and high-net worth individuals. There is a case study on a plan to save the Big 3 U.S automakers, using Islamic private equity and sukuk, on the heels of a Vatican article which stated sukuk could be used to save the ailing car industry and finance the Olympic Games in London. There are also practical case studies on small businesses like restaurants seeking private equity funding and more whimsical studies on the buying and selling of polo ponies.
Majid Dawood, Yasaar Limited- "This is a timely and value-added offering to the literature on Islamic finance … Shahzad has taken the task at hand and produced what takes the reader through the explanations of private equity in the conventional sense, its history and then the relevance and applications to Islamic finance. The number of case studies will help the readers to come to grips with the structures utilised and how to apply them to their own initiatives. The amount of research in an industry with a short history and lack of substantive data is quite impressive and obvious in the result.
He has applied his strong knowledge of the subject and Islamic finance to review the various forms and applications and put them in the context of their utilisation from the conventional stand point to Islamic finance. The description and explanation of the variety of forms that private equity investment can take through real examples will be a major contribution to the understanding of this interesting industry.
The book is comprehensive in that it covers the historical notations from the Greco-Roman era, through the Judeo-Christian period, to Islam, the regulatory regimes are explained from both the Global and Islamic perspectives on a global basis covering the conventional and Islamic jurisdictions, the due diligence procedures section is quite exhaustive and provides a good reference model to ensure that this extremely important part of the private equity investment is thoroughly understood and applied, the different models and matrixes give a view of the options available to the fund manager. Comparisons between conventional and Islamic forms and needs as well as a variety of case studies to bring about an accomplished rendering will be of immense use to practitioners and students of the sector alike. The fundamentals of the set-up and operation of an Islamic Finance Private Equity fund and its management have been laid out in a manner that would be a good check list for operators and managers of Islamic Private Equity funds as well as Islamic asset managers. The future is addressed in the Fund of Funds model which is more likely once the critical mass develops."
Nick Smith, Dow Jones- With Islamic investment forming an increasingly important component of a rapidly-evolving global financial system, Shahzad Siddiqui’s comprehensive survey of Shari’a-compliant private equity could not be more timely. Private equity represents an essential – and hitherto underdeveloped – application of Islamic economic principles, and the book meets an urgent need amongst financial professionals for an in-depth, English-language analysis of the close synergies between the two.
Following an outline of private equity as an asset class and the historical pedigree of its Shari’a-compliant forms, Mr. Siddiqui provides a valuable overview in the first half of the work of the concepts behind Islamic private equity deals and funds, along with engaging discussions of the often-complex regulatory, structural and due diligence issues raised by the sector. The reader is regularly referred to concrete examples of Islamic private equity in practice, an approach which provides useful context to a thorough and wide-ranging theoretical grounding.
This commitment to illustrating the practical applications and benefits of Shari’a-compliant private equity is most fully manifested in the second part of the book. Accompanied by numerous examples of real-world contracts and documents, Mr. Siddiqui offers no less than 20 interesting case studies spanning investment in movies, Chinese real estate and polo horses. Readers will be left in little doubt that private equity based on Shari’a principles represents a versatile and competitive alternative to the current mainstream, and has the potential for similar growth as more established areas of Islamic finance.