CIMB Group and Principal Financial Group (PFG) have taken their partnership to the next level with the formation of another joint venture in the management of Islamic assets.

CIMB chief executive Datuk Nazir Razak said the 50:50 JV CIMB-Principal Islamic Asset Management Sdn Bhd was a global Islamic asset management institution. This joint-venture is to tackle the whole Islamic world, he told reporters after launching the new company here yesterday.

Nazir said CIMB-Principal Asset Management Sdn Bhd and CIMB Wealth Advisors had transferred RM4.1 billion worth of the Islamic funds under its management. The new company will operate from the Malaysia International Islamic Financial Centre (MIFC).

MIFC was initiated through the collective efforts of the country's financial and market regulators, with industry participation from the Islamic banking, takaful and capital market sectors. It was launched in 2006 to strengthen the country's position as an Islamic financial hub in Asia.

The Securities Commission (SC) announced last Sunday that it had given licence to three financial institutions to establish Islamic fund management companies (IFMCs). CIMB-Principal Islamic Asset Management was one of them.

Nazir said: We have sales target for our sales person but we do not have any year-end sales target for the company. Without giving a timeframe, he added that the company could show double-digit growth.

Nazir said the CIMB-Principal Islamic Asset Management would focus on the Southeast Asia and the Gulf Coast Council (GCC) regions, besides Asia, Europe, the Americas and the Middle East.

PFG president and chief executive Larry Zimpleman said: The Syariah-compliant market is demonstrating tremendous growth possibilities. Our partnership would enable PFG to address key markets for both conventional and Syariah-compliant products and services.

Raja Nazrin Shah, who witnessed the launching with Bank Negara governor Datuk Dr Zeti Akhtar Aziz, expected the financial market to continue to be volatile as banks continued to deleverage and reduce lending activities, thereby causing a contraction in credit supply.

Fundamentally, Islamic finance is founded on the principle of equity, where both profits and risks are shared between the provider and recipient of funds. This principle that aligns the interests of both parties and promotes transparency in financial transactions has found wide appeal among Muslims and non-Muslims, he said.

- The Edge Daily omar 1.1 iimm