Private Equity: Islamic Perspective

Private Equity: Islamic Perspective

Shariah investment is an alternative investment method with two governing fundamental principles; a) the sharing of the profits and losses and b) the collection of interests (‘riba’ in Arabic) by the lenders is strictly prohibited. There is also the requirement that the underlying assets have to be Shariah compliant.

What makes an asset Shariah compliant? Is this method of investment only used by Muslims? Given that certain assets are not shariah compliant, how are ROIs maximised? Do Shariah investments extend to Venture Capital and Private Equity? What is the market landscape for Shariah investments, with special focus on Africa especially in the VC/PE space?