Lombard Odier partner Leclercq told CPI Financial that the while the offering began as a bespoke creation for one client, it has grown from a $10 million to in the hundreds of millions, primarily for investors in the Middle East. Lombard Odier's Islamic investments have averaged 4-5 per cent returns since 2012. The goal is to reach $1 billion in the next 3-5 years, Leclercq told CPI Financial.
Lombard Odier has launched of a full suite of Shari'ah-compliant investment solutions, the first in its 222-year history.
Lombard Odier’s exclusive discretionary mandate has been officially certified as Shari'ah compliant by the eminent Shari'ah Supervisory Board of Amanie Advisors, who issued a Fatwa in February.
"As an independently owned, family bank with a long-standing legacy, the new offering follows a tradition of social responsibility including a focus on developing sustainable and responsible investment solutions. With the goal of preserving the assets and values of clients at its core, the Shari'ah offering builds upon Lombard Odier’s legacy of 50 years in the Middle East," said a statement from the bank.
Arnaud Leclercq, Limited Partner at Lombard Odier Group, came to Dubai for the launch, coinciding with the Holy Month of Ramadan.
Leclercq stated that the while the offering began as a bespoke creation for one client, it has grown from a $10 million to in the hundreds of millions, primarily for investors in the Middle East. Lombard Odier's Islamic investments have averaged 4-5 per cent returns since 2012.
The investments are a mix between Sukuk and equities. Equities are chosen using a combination of MSCI's Islamic Index and Lombard Odier's in-house experts and economists who "cherry-pick" stocks according to their overall investment strategies, Leclercq told CPI Financial. The goal is to reach $1 billion in total Islamic investment the next 3-5 years, Leclercq said.
“While Lombard Odier has been proud to offer a range of solutions in line with Shari'ah principles, including Shari'ah-compliant investments since 2012, this is the first time we are offering a unique Shari'ah-compliant discretionary mandate. The decision to offer fully customisable Islamic investment solutions globally is a testament to both our commitment to our clients and our commitment to growth within the Gulf Cooperation Council (GCC)," said Leclercq.
The clients that are currently being serviced with these solutions are primarily from the UAE, Saudi Arabia, and Kuwait, CPI Financial was told. Lombard Odier plans to increase its presence in the Middle East alongside the growth of its Shari'ah-compliant investment solutions, with an office in Abu Dhabi for the coming year currently in the planning stages, and a partnership with a Saudi firm currently in the works, Leclercq told CPI Financial.
“Given Lombard Odier’s history in the region, the Shari'ah-compliant offerings display our commitment to growth in the UAE, which is among the strongest markets for Islamic finance. As Islamic finance continues to gain momentum exponentially, the link between Shari'ah-compliant investments and the promotion of social responsibility becomes increasingly clear. We find this to be the case especially in the UAE, where the strong emphasis on philanthropy, innovation and sustainability leading up to Vision 2021 fosters the growth of Islamic finance," said Christophe Lalandre, Managing Director at Lombard Odier’s Representative Office in Dubai.
"Driven by Lombard Odier’s founding principles of integrity, responsibility and long-term vision, the fully customisable and selectively chosen Shari'ah-compliant offerings are aligned with Lombard Odier’s pre-existing investment strategy. The firm favours high liquidity and prudent investments, and as one of the world’s most highly capitalised institutions (CET1 ratio of 26.5 per cent at end-2017), we do not rely on external debt," Lalandre said.
"In fact, socially responsible investments (SRI) have been an integral part of Lombard Odier’s DNA throughout its history in an effort to match client needs and values. As a pioneer in sustainable investing guided by moral and ethical codes for ESG (environment, social and governance), Lombard Odier’s team of experts across the world have developed a tailor-made approach to asset management and wealth planning," he continued.