Gulf Times - Gulf Times Business
Islamic robo-adviser to expand in Gulf by 2019
New York-based Wahed Invest plans to offer its automated investment service in the Middle East and Southeast Asia by early next year, after the robo-adviser closed its latest round of fund raising, its chief executive has said.
The Shariah-compliant firm made its international foray in August, launching its services in Britain, aiming to tap into Muslim investors seeking religiously permissible investments.
The firm is now working with the financial regulator in Malaysia and anticipates a three-month timeline for a launch in the Muslim-majority country, said chief executive Junaid Wahedna.
The firm has raised $8mn in capital this year, giving the company a valuation of $100mn, he added.
The firm is backed by Gulf investors and venture firms including Boston- based Cue Ball Capital and Dubaibased BECO Capital. Robo-advisers automatically create and manage portfolios made up of exchange-traded funds for customers with as little as a few hundred dollars to invest.
The market was initially developed by start-ups such as Wealthfront and Betterment, but a growing number of entrants has put pressure on them to diversify their offerings.
Wahed has seen healthy growth in Britain with client adoption rates that are twice as high as in the US, where it now has over 5,000 registered clients.
The company estimates that by March next year it could be adding 500 clients per day across its geographies, Wahedna said.
In September, the firm launched two index-tracking funds which follow indices that are screened by Standard & Poor’s.
Islamic financial products follow religious principles such as bans on investing in gambling and tobacco, in much the same way as socially responsible funds.