BNP Paribas Investment Partners launched an Islamic private placement fund investing in Shariah bonds and Murabaha, the asset manager said.
The Sukuk, or Islamic bonds, and Murabaha structures will be mainly issued in the Gulf of Cooperation Council countries by companies and governments.
Under a Murabaha deal, an Islamic bank buys an asset from a third party and sells it to its customer at cost plus profit. This allows the bank to extend financing without charging interest, which is forbidden by Islamic law.
"We are convinced that Islamic investors, although they continue to focus on equities, will benefit from diversification and will turn to other strategies, such as the ones used in this fund," Tariq Al-Samahiji, chief executive of BNP Paribas Investment Middle East said in a statement.
Fischer Francis Trees & Watts, BNP Paribas Investment's global fixed-income specialist, will manage the fund.