Prestige Funds Launches Dedicated Islamic - Impact Fund For UK Agri And Renewables Financing

First Islamic - Impact fund from specialist private finance manager
Targets smaller companies and renewable energy projects in the UK
Backed by a highly experienced commercial finance team in Cambridge, England

Prestige Funds, one of the leading specialist private debt investment managers in the UK, has launched the ‘Premium Alziraea Fund’, a Shariah-compliant real assets and project financing fund targeted at the renewables and agriculture sector in the UK.

The new Cayman Islands-domiciled Fund will invest in a diversified portfolio of secured asset and project-based finance projects many of which may be or are backed by the UK Government. The Fund’s strategy has a low correlation to equity, bond or commodity markets.

The Fund will be investing across a broad portfolio of projects and small businesses with a focus on UK agricultural, horticultural and rural small businesses which have historically operated with lower defaults than other sectors.

The Fund will operate as an open-ended vehicle although it will have a one year lock up and monthly liquidity on 90-180 days. The Fund will be aimed at Islamic institutional investors looking to diversify their investment portfolios and will be available in accumulation and distribution share classes in GBP / USD / EUR currencies. The target asset raise in year one will be USD 50-75m, although the current investible opportunity pipeline stands at GBP 500-700m / USD 685 / 960m over the next 1-3 years.

The Premium Alziraea Fund will follow a similar project / financing investment strategy managed by Prestige Fund Management which has generated positive, consistent, uncorrelated returns for over 12 years and has approximately USD 750m of asset under management.

The Premium Alziraea Fund leverages the combined expertise of both the Prestige group and the considerable team of rural infrastructure financing experts at Prestige’s dedicated, specialist Finance Arranger - Privilege Finance.

Based in Cambridge, England, Privilege draws on a team of almost 60 people with extensive commercial banking backgrounds and represents a considerable centre of expertise for agricultural / renewable energy and waste to energy financing.

Privilege already backs one of the largest portfolios of on-farm clean energy projects in the UK in what is a small and specialist financing market. It is recognised as an expert in the field of bringing biogas projects online and is an active member of the UK Anaerobic Digestion and Biogas Association.

“Premium Alziraea is our first Islamic - Impact financing product and is targeting an exceptionally important part of the UK economy at a critical time in its ongoing development,” commented Craig Reeves, founder of the Prestige group. “Our portfolios often finance landowners who are taking food, farm and animal waste and turning it into bio-gas and electricity, projects in turn supported by the UK government.”

Prestige Funds has now raised over USD 2 billion internationally for its range of alternative finance funds: it is active in the SME market in the UK and the US and has developed a huge amount of in-house expertise in terms of managing financing for the important UK smaller companies market. The SME sector in the UK accounts for over 99% of the jobs in the UK economy.

SOURCE: Department for International Trade (DIT) small and medium enterprises (SME) action plan - GOV.UK (www.gov.uk)

The Fund’s Shariah advisor is Sheikh Dr Mohamed Ali Elgari, former Professor of Islamic Economics and a former Director of the Center for Research in Islamic Economics at King Abdulaziz University, Jeddah, Saudi Arabia. He is a member of numerous Shariah Boards of Islamic banks and Takaful companies worldwide.

Prestige has retained Dubai based, Kroma Capital Partners as its Middle East Distribution Partner.

The Premium Alziraea Fund will target capital appreciation of 5-7% per annum (net) with target annualised volatility of 1% and will operates without using leverage or performance fees.

PRESTIGE FUNDS - TRADE EXAMPLES

The Premium Alziraea Fund will follow the same trading strategy as the Prestige Alternative Finance Fund which was launched in 2009.

https://www.prestigefunds.marketing/wp-content/uploads/PALTF-Finance-Trade-Examples.pdf

Premium Alziraea Fund

Summary of Terms:

FUND:	Premium Alziraea Fund Limited
DOMICILE:	Cayman
STRUCUTURE	Open Ended Investment Company (OEIC)
INVESTMENT STRATEGY:	Shariah Compliant Asset Based - Direct Financing - Project / Asset Finance
INVESTMENT MANAGER:	Prestige Fund Management Limited
INVESTMENT ADMNISTRATION & MARKETING SUPPORT:	Prestige Asset Management Limited
FUND DISTRIBUTOR:	Prestige Asset Distribution Limited
FUND DISTRIBUTOR (Switzerland):	OpenFunds Investment Services AG
FUND DISTRIBUTOR (Middle East GCC)	Kroma Capital Partners Limited
FUND ADMINISTRATOR:	MUFG Alternative Fund Services (Cayman) Limited c/o MUFG Fund Services (Ireland) Limited
FUND CUSTODIAN & BANK:	Intesa Sanpaolo Private Bank (Suisse) Morval SA
FUND AUDITOR:	Grant Thornton, Cayman
FUND SHARIAH ADVISOR:	Sheikh Dr. Mohamed Ali Elgari
SHARE CLASSES:	Participating A-Shares and I-Shares Distribution D-Shares and ID-Shares
CURRENCIES:	USD / EUR / GBP
MINIMUM SUBSCRIPTION:	Participating A-Shares and I-Shares: USD 1000,000 (or currency equivalent) Participating D-Shares and ID-Shares: USD 1,000,000 (or currency equivalent)
MINIMUM TOP UP:	Participating A-Shares and I-Shares: USD 10,000 (or currency equivalent) Participating D-Shares and ID-Shares: USD 100,000 (or currency equivalent)
SUBCRIPTIONS:	Monthly
REDEMPTIONS:	Participating A-Shares and I-Shares: 90 days’ notice in year 2 Distribution AD-Shares and ID-Shares: 90 days’ notice in year 2, calendar quarterly
FEES:	Management: 1.50% p.a. Redemption: A-Shares and I-Shares: 5% in year 2, declining by 1% p.a. AD-Shares and ID-Shares: 1% in year 2 Performance:0% Initial: 0%

The Macro Environment

With rising costs across almost all industrial and commercial sectors, farming, food and agriculture often remain deeply inefficient while at the same time the UK wastes more food than any other country in Europe and has a rising population. There is an increasing demand to finance in productivity.

Over the last century, the global population has quadrupled. In 1915, there were 1.8 billion people in the world. Today, according to the most recent estimate by the UN, there are 7.3 billion people - and we may reach 9.7 billion by 2050. This growth, along with rising incomes in developing countries (which cause dietary changes such as eating more protein and meat) are driving up global food demand.

The UK imports approximately 50% of its food requirement while global food demand is expected to increase anywhere between 59-98% by 2050 according to the United Nations. Additionally, the UK wastes more food than any other country in Europe according to research published by the Daily Telegraph newspaper, while research from Bloomberg suggests that food staple prices have doubled since 2000.

This will almost certainly shape agricultural markets in ways we have not seen before. Farmers worldwide will need to increase crop production, either by increasing the amount of agricultural land to grow crops or by enhancing productivity on existing agricultural lands through fertilisers and irrigation and adopting new methods like precision farming. With approximately 66 million people in the UK (of which approximately 8m were born overseas), and 5.7 million SMEs this represents a significant opportunity for investors.

SOURCE: UK Office of National Statistics (ONS)

Foodstuff Staples (Index): Q2/2000 - Q2/2018

Environmental concerns

The UK is a full signatory to the Paris Climate Change Accord and has signed into law that it will be carbon neutral by 2050. The UK also announced the ban on sale of new petrol and diesel cars from 2030 and will potentially source up to 20% of its gas supplies from domestic renewable sources within ten years and entirely stop burning coal to generate electricity within 15 years. Additionally, the use of landfill waste disposal is also expected to stop within 15 years.

Rising electricity prices in the UK and higher taxes on landfill are causing these agricultural businesses to turn to green energy projects as a source of on-farm energy, utilising existing waste. However, farming and food production is also the second largest producer of C02 after energy production.

Investment and spending on renewable energy and electricity generation and charging infrastructure will increase significantly over the next 10 years. Taxes on polluters in the old economy will rise especially in areas such as waste which will encourage businesses to invest strategically in the ‘greenification’ of individual industries.

SOURCE: Prestige Fund Management Limited

Macro Environment - 2021 Observations

As we begin 2021, several key macro uncertainties have been removed and many new opportunities are ahead of us.

USA / Election - new president
UK / Brexit - trade deal completed
Pandemic - multiple vaccines approved (with many millions of people in UK / USA / EU already vaccinated and this will accelerate through 2021)

plus

Massive new fiscal stimulus programmes in UK / USA / EU
USD / UK / EU Interest rates expected to remain lower for longer
USA +4% GDP growth 2021 (SOURCE: Goldman Sachs)
USA Manufacturing PMI +19.54% from one year ago and hits a +6 year high in December (SOURCE: YCharts / Reuters)
USA Households saved USD 1 trillion more in 2020 (SOURCE: Business Insider)

plus

UK +5-7% GDP growth 2021 (SOURCE: Goldman Sachs)
UK Manufacturing PMI hits +3 year high in December (SOURCE: Goldman Sachs)
UK Household excess savings grew by GBP 100 / USD 135 billion in 2020 (SOURCE: Bank of England)

plus

UK hosts G7 Summit in 2021
UK hosts United Nations Climate Change Conference in 2021 (COP 26)