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I Sfin Vision On A Global Strategy For Islamic Finance V2
- 1. iSfin The world’s leading Islamic Finance lawyers Why a global strategy for ISLAMIC FINANCE LAW ? COMMERCIAL VISION FOR 2011
- 2. An Immense power of investment in 2011 Sovereign wealth funds have an increasing interest in investing globally. The first wave saw investments taking place in the Gulf , the second wave reached the West, and a third wave is likely to hit globally. The persisting global economic downturn and the negative growth of some Western economies will continue to affect markets throughout in 2011. After Greece and Ireland, who will be next ? Portugal, Spain ? The Middle East was not hit by the economic recession in the same way Europe, the US, and some of the Asian economies were. The lack of liquidity has not heavily affected the region and its markets will rebound faster than others. The so-‐called ‘emerging markets’ are likely to balance the world economy. Islamic financial investors have now the liquidity to lead worldwide investments. The economy has to recognize and service these investors with a specific profile and particular needs. Islamic Finance : Money and Law Sharia accredited investments go beyond simple financial mechanisms . The law and the legal framework regulating these investments are substantial. Islamic finance is a mix between money and law! Global law firms have understood the potential behind Islamic Finance and have started investing in sub-‐practice groups within their Banking and Finance departments. Key players in the sector include Allen & Overy, Norton Rose, Linklaters, Clifford Chance, Hogan Lovells,… They had the capacity to establish a broader presence and have opened up offices in several centres in the Middle East. They were followed by some international firms who started establishing one or two small outposts; looking to take advantage of the high predicted growth rates for the Middle East. The goal is obvious: to counterbalance the loss they faced over the last two years in London or generally in their Western centres! We believe this strategy is wrong! Ethically, this very opportunistic approach had some firms focusing on short-‐term investments, whitout developing a real and true interest in those countries. This reminds us of another – bygone -‐ era as these firms simply capture their « fair share » of legal work associated with outbound investments without seeking to satisfy the long-‐term aspirations of these investors. This is simply against the spirit of Islamic Finance which places ethics and morals at the heart of investments … Practically, many of these firms simply send an underperforming partner from their home office who recruits a couple of local associates to set up their Islamic Finance practice. The most skilled lawyers of these firms, at the associate level, remain in the home office. Resident partners often only stay a couple of years then go home and lose the personal connections they had just started to establish. Geographically, this results in bilateral or at best slightly multilateral connections: London – Dubai, New York-‐ Abu Dhabi,… Even the global firms are missing out, as, while they may be able to place a few real specialists in Islamic Finance law in some locations, they are certainly not able to cover all their offices ! Most local offices of global firms do not have the faintest idea what a « sukuk » is about !
- 3. iSfin : the global alternative Private and public Islamic Finance investors are now seeking a truly global solution to allow for the diversification of their investments. They require a provider of legal services which can handle : - outbound investments - inbound investments - offshore investments No law firm can possibly provide a team of legal experts active in : - outbound countries such as UAE, Saudi Arabia, Qatar, Oman, Bahrain, Kuwait, Malaysia, Singapore, Indonesia,… - inbound countries such as the G20 countries as well as emerging markets like India, China, Brazil,… - offshore territories such as Jersey, Guernsey, Malta, Isle of Man, BVI, Luxembourg,.. that offer tax structuring. Banks, funds, private and public investors are seeking a broader network. They want to be serviced on a global and on a regional scale. They are looking to do business in all major centres and seek a true one-‐stop shop. On top of these geographical constraints, financial markets are increasingly producing deals combining both conventional and Islamic aspects. They require two sets of expertise and multi-‐jurisdictional access. Property-‐based lending, project finance & infrastructure projects require experience from true Islamic Finance specialists. Another huge emerging market is opening up for I.F. specialized lawyers around the world : many States and Governements are changing their regulatory environment to make it Islamic Finance friendly. Skilled lawyers should accompany the legislative process, as has been the case in France, Luxembourg or Spain. Only Local lawyers specialized in the specificities of Sharia law can achieve this. Understanding sophisticated needs We believe that Islamic Finance investors need to be serviced: - by expert legal practitioners with a track-‐record and experience in banking, finance and tax earned working directly on Islamic Finance files - by lawyers well-‐established in their local jurisdictions with access to a global/worldwide network of specialists - by skilled individuals in the country of origin, the target country of the investment and tax havens providing support for the deal. iSfin gathers member firms in all key countries, with coverage in more than 90 countries, enabling it to provide any company with fully-‐coordinated, yet locally-‐specific, global advice in all aspects of Islamic Finance (Shariah-‐compliant and conventional transactions). Geographic spread includes inbound and outbound investment markets as well as tax haven jurisdictions. iSfin cover all areas of Islamic finance contracts, including bai salam, ijara, istina / salaam, mudaraba, murabaha, musharakah and sukuk. Debt capital markets, securitization, equity capital markets, loans, leveraged Finance, acquisition finance, asset finance, structured finance, project finance (power, water, petrochemicals, oil & gas,…), regulatory and shariah governance, real estate, investment funds.