DinarStandard Editors

Canada's UM Financials finds a Unique Partner

UM Financials is a steadily growing provider of Shari’ah compliant financial products to the Muslim community in Canada.  The company was recently profiled by the Toronto Star newspaper in an article which showcased the company’s recent growth through a unique partnership – UM Financial is partially backed by a Jewish investor.  At first glance many readers might think, “A Muslim in partnership with a Jew?!”  It is unfortunate that the founder of UM Financial, Umar Kalair, has been criticized for approaching conventional financial institutions for support.  The fact of the matter is that Kalair committed himself to developing financing for customers who wanted Shari’ah compliant finance and he delivered on that commitment.  He observed that the Prophet (s) bought grains from a Jewish merchant after mortgaging his armor with him.  Kalair’s UM Financial has received support from the Credit Union Central of Ontario and is now partnering with Derek Scheinman of New Horizon Mortgage Investment Corp. to structure Shari’ah compliant commercial real estate financing.  Such partnerships keep it real – for all the ideology and identity behind the parties in this transaction Kalair and Scheinman are doing business.  Each party looks to their benefits and measures risk against reward before proceeding.  This deal makes sense for everyone involved.

Prince Al-Waleed on reform, investment, and the future of Islam

This month, the McKinsey Quarterly features a lengthy interview with Prince Al-Waleed bin Talal of Saudi Arabia, one of the most successful international investors today. Prince Al-Waleed represents the best of the new breed of global businessmen who integrate their investment prowess with their vision for society as a whole. Prince Al-Waleed in particular stands out because he exerts a global impact from within the Muslim World. Prince Al-Waleed’s holdings in such global and regional corporations such as Savola Group, LBC, Four Seasons Hotels, Citigroup, News Corp., - and the list goes on – make him a man whose opinions are taken seriously from the trading floor, to the board room and the hallowed halls of government around the world. Awarded the Humanitarian Contribution to Islam award by the International Islamic Finance Forum, Prince Al-Waleed has donated over $100 million to various academic and civic causes ranging from the Islamic Studies program at Harvard University to supporting the Islamic wing of the Louvre in Paris – all to bridge the gap between Islam and the West.

Commenting on the interplay between different forces affecting global capital flows after 9/11 he says, “…politics is mirrored in economics and finance”. But interestingly rather than reflect this by avoiding investment in the US like many other investors from the Middle East, Prince Al-Waleed says that after 9/11 his investments in the US grew “strategically”. We look forward to seeing the Prince’s investments bear fruit – not only in the business world but also in the world of ideas.

Birth of Venture Capital in the Arabian Gulf

On February 20-22nd, 2006, a historic gathering of the nascent Venture Capital and Private Equity industry of the MENA region was organized in Manama, Bahrain under the auspices of the newly formed Gulf Venture Capital Association (GVCA).  What's the big deal?  Afterall there are so many events happening in the region that are just talk with little substance.  Well this event apparently turned out to be something special.

According to Jerry Borrell of Private Equity Week, who attended the event, at least 21 new funds were announced, ranging in size from $28 million to over $10 billion.  Interestingly the focus was on investing in regionally-founded, regionally-run and regionally-operated funds.  Little interest was shown on raising funds for American or European venture funds.  PE Week also projects that funds from the Gulf region will raise at least $17 billion by the end of 2006 which could pass the total of all new PE funds being raised in Asia (inclusive of China and India)!

So will the GVCA live up to its purpose?  Only time will tell.  We certainly pray and hope that the GVCA will not just wither away, but play a sustained critical role in developing the financial engine of an entrepreneurial, innovative regional economy.