Sidra Capital establishes its first Singapore-based VCC

Sidra Capital, an asset management firm regulated by the Saudi Arabian Capital Market Authority, has launched its maiden Singapore-domiciled variable capital company Sidra Asian Opportunities Investment I VCC (VCC).

“Sidra Capital is at the forefront of innovating private finance investment solutions, and the VCC is a natural progression in the process, taking advantage of Singapore’s robust legal framework and being home to major global financial institutions, as well as extensive double tax treaties with various jurisdictions, which ultimately benefit the fund investors,” said its chairman, Hani Baothman.

In a statement, Sidra Capital said the VCC was launched with an investment strategy focused on facilitating cross-border commodity supply chains via fully funded irrevocable Letters of Credit (LC), in November last year. The VCC specifically targets the high demand for solid fuel produced by select Indonesian producers, valued for the intrinsic qualities of the commodity and reliability of the producers in delivering the expected quantity and quality to purchasers.

To enhance security the underlying trades are secured end-to-end by US dollardenominated LCs issued or confirmed by banks with strong credit ratings, which eliminates foreign exchange and payment risks. Furthermore, as the trades are structured as backto-back purchases and sales of commodities rather than speculative trading, investors are not exposed to inventory and price risks.

The VCC is managed by Sidra Capital Pte Ltd, a wholly-owned subsidiary of Sidra Capital, which operates as a registered fund management company licensed by the Monetary Authority of Singapore.

Establishing itself as a pioneer of Islamic private finance in Saudi Arabia, Sidra Capital’s portfolio includes a range of Shariah-compliant private finance investment solutions such as the acclaimed Sidra Income Fund series and SidraAncile Global Structured Trade Investment Fund.