Compelling case for private equity funds

The CIMB Muamalat Fund closed in June 2003 after raising US $86m and has now begun to invest in companies through private equity buyouts. Asia is a strong new market for investment in start-up and developing companies. Some of the issues involved in a buyout include: appropriate management of the company to be taken over, proper valuation, when to enter and exit the market, how to best promote growth, and Shariah compliance. The targeted IRR is 30% per annum, therefore the buyout companies must be able to grow to that level, and will typically be leaders in their sector of the market.