Malaysian Reserve: Australia's Leading Islamic Super Fund Eyes Expansion

4 April 2016 – reported by Anna Chimdabar for Malaysian Reserve’s business section “Money”.

Crescent Wealth believes Malaysia is a ‘great partner’ with experience to manage Shariah-compliant products. Sydney-based Islamic superannuation and investment firm Crescent Wealth, which has parked RM100 million through Malaysia, is looking at deepening its presence in the region. The Australian firm is looking to partner financial institutions from Malaysia and its neighbouring countries to produce and market Shariah- compliant investment products. “Not only do we want to place capital here, we want to offer Malaysians investment opportunities in Australia, we firmly believe that it is a two-way street, partnership in the real sense,” Crescent Wealth director of corporate strategy and development Omar Khan told The Malaysian Reserve.

Crescent Wealth, currently manages a total investment of A$160 million (RM478.4 million), is talking to a number of financial institutions in Malaysia. Crescent Wealth is the trading name for Crescent Wealth Funds Management (Australia) Ltd, a wholly owned subsidiary of Crescent Wealth Investments Australasia Pte Ltd.

Superannuation is Australia’s compulsory long-term savings plan that puts away 9.5% of a members’ money and invests it on their behalf for retirement. It is almost similar to Malaysia’s Employees Provident Fund (EPF), except that the Australian system allows the employee to choose to park their investment with numerous private investment funds.

Omar, who took part in a financial conference in Kuala Lumpur, said that Malaysia is a “great partner country” as it has the experience to manage Shariah-compliant products over and above the existence of financial institutions. “We find that a lot of Malaysian companies are advanced in Islamic finance because they have the experience. In Australia, we have honed our skills in marketing development and engagement of clients with financial products. So if we combine the two, we become a pretty powerful force,” he said. He claims Crescent Wealth is the first private Islamic-compliant pension fund in the world. On what would attract Malaysian investors to the firm, Omar said Malaysians are pre-disposed to Australia as they have either studied or have kids studying there, like visiting Australia and have a healthy appetite for properties there. “We want a firm presence in Malaysia as well as the Malaysian market equally. In five years, I will be happy managing A$500 million through new partnerships jointly developing products and initiatives to fortify a two-way capital fund flow,” he said. Crescent Wealth has a Malaysian advisory board whose role is to provide strategic advice. The board includes Datuk Mohamed Azahari Mohamed Kamil and Mohd Ridzal Sheriff, according to information at the company’s website.

Mohamed Azahari has just retired as the CEO of Kuala Lumpur-based Asian Finance Bank Bhd while Mohd Ridzal was the deputy secretary general of the Ministry of International Trade and Industry Malaysia till 2015. On some of the initial challenges faced by the company, Omar said Muslims residing in Australia are newer migrants and have smaller savings. “When we started, everyone said it was not possible to set up an Islamic fund, but we banked on the A$2 trillion in savings and Australia’s 2.5% Muslim population. Just based on these figures, we estimated that it is a A$45 billion market,” he said. Using Australian Bureau Statistics, he estimated that the Australian Islamic community has between A$20 billion and A$22 billion in pension savings alone. He said the Islamic investment fund scene sorely lacks in innovative financial products, with a majority of Shariah-compliant funds concentrating on equity products. Crescent Wealth’s Shariah-compliant investments are supervised by Shariah supervisory board Dar Al Shariah.