Saudi Arabia-based investment bank, Sidra Capital is changing its initially closed-ended Islamic Trade Finance Fund to be open-ended to meet growing interest from regional investors. The Luxembourg-registered fund offers working capital to small businesses focused on agricultural commodities, as well as energy and metals.
Launched in 2012 with assets of $15 million, the fund finances small business involved in the production of commodities such as cocoa, maize, rice, and cotton, until they reach a suitable scale to obtain bank financing – usually becoming medium sized companies within three years.
After a first tranche of $50 million from GCC investors brought total assets under management for the structured trade investment fund to US$67 million, Hani Baothman, chief executive of Sidra Capital told Reuters that further inflows are expected.
The fund is currently examining transactions in sub Saharan Africa, Malaysia, and eastern Europe. When asked if it plans to bring its strategy to play in Saudi Arabia, Mr. Baothman indicated that it is being considered but adds it will not happen in the near future.
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