LONDON: BNP Paribas Investment Partners, the French group's fund management arm, plans to grow its Islamic business five-fold or more in the next two years, its Middle East head said yesterday.

"We currently manage about half a billion dollars in total Sharia-compliant assets and our target is to multiply our assets by over five times in the next two years," chief executive for the Middle East and North Africa Tariq Al Samahiji said.

Al Samahiji expected growth to come from Middle Eastern investors, but also from those in the West interested in Sharia management because it demands investments be backed by assets and rules out leveraged companies.

The bank currently offers equity Sharia management and has recently started marketing its first Islamic bond or sukuk fund. "At this point in time the fund is very much focused on companies that are in the Gulf and this is largely to address demand from our clients," he said.

Al Samahiji expected the sukuk fund to attract investments from institutions and wealthy individuals, but stressed BNP would not market the fund to the retail market.

A Moody's report said global sukuk issuance last year fell by more than 50 per cent because of market conditions, but the French bank was still confident this was the right time to launch a sukuk fund.