European Finance House's Liquidity Fund rated AAf S1+ by Standard & Poor's
On 4 May 2010, Standard & Poor's Ratings Services (S&P) announced that it had assigned the EFH Liquidity Fund ("the Fund") its 'AAf' rating for fund credit quality and its 'S1+' rating for fund volatility. The Fund is the first offshore Islamic fund to receive such ratings from S&P as the agency begins to employ credit scores and ratings as a means to increase transparency in the world of Shari'a compliant financing.
The Fund, an open-ended vehicle with variable capital, is based in Luxembourg and hosted on the Shari'a compliant EFH Fund SCA SICAV-SIF platform, the custodian for which is Bank of New York Mellon. The aim of the Fund is to provide daily liquidity to investors predominantly by entering into Wakala agreements with specific Islamic institutions.
The Fund is an ideal tool for treasurers, institutions and fund managers alike to manage their liquidity in an Islamic way. Liquidity management in Islamic finance is complex due to the nature of contracts and agreements so the arrival of this product will be especially welcomed by the industry.
Anouar Adham, Head of Asset Management at EFH, commented:
"We are delighted with the strong ratings assigned to our Liquidity Fund by S&P as they reflect the stability, flexibility and practicality this product can provide to investors. Building on the expertise gained from establishing and actively managing our Global Sukuk Plus Fund - which outperformed its benchmark by over 6% in its first year while maintaining low volatility - we have created this Islamic Liquidity Fund which provides attractive returns for short-term placements."
Michael Clark, Chief Executive Officer of EFH, added:
"EFH, in partnership with our parent Qatar Islamic Bank, is proud to bring such an innovative fund to the market, a product which not only offers investors a solution to the challenge that Shari'a compliant liquidity management presents but also, thanks to its rating, contributes to increased transparency in the industry. I believe this to be an important step forward for our sector."
The Fund's 'AAf' rating (strong protection against losses from credit default) is S&P's opinion on the overall credit quality of our fixed-income Fund's portfolio, whilst the 'S1+' rating (lowest sensitivity) is an opinion on the Fund's sensitivity to changing market conditions.
For the full press release concerning the EFH Liquidity Fund's rating, please click here 
(358Kb)
For further information on Standard & Poor's use of ratings as a tool to assess credit and market risks in Shari'a fund, please click here to download their full report (501Kb)
Contact Details:
Anouar Adham
Head of Asset Management, European Finance House Ltd
+44 (0) 207 268 7200
aadham@europeanfh.com
Notes for Editors:
EFH, a 66% subsidiary of Qatar Islamic Bank ("QIB"), is a UK-based Islamic investment bank, authorised by the Financial Services Authority ("FSA") in January 2008. EFH offers products and services to a wide range of clients, and plays an important role in attracting investment from the Middle East into the UK and Europe. The bank also supports and advises UK and European entities looking to invest or trade in the Middle Eastern markets. Its four business lines are Asset Management, Corporate Finance, Real Estate and Treasury.