New Islamic endowment trust seeks to be UK’s first waqf to combine commercial and social investments
A new charitable foundation is being set up in the UK that aims to become a £1 billion waqf fund combining commercial and social investments.
There are waqf funds in the UK which are targeted by specific organisations like Islamic Relief or the East London mosque. However, there are few social waqf funds focused on capacity building in society.
In an exclusive interview with Salaam Gateway, Sultan Choudhury, Executive Chairperson of the new One Endowment Trust (OET) and former CEO of Al Rayan Bank, explains how the waqf will meet its goals as well as longer-term objectives.
“The vision of the One Endowment Trust is to present Islam in a positive way though contribution to UK civil society,” said Choudhury.
“We aim to build assets that generate returns that will support sustainable social projects.”
OET’s commercial investment strategy will be focused on three areas: real estate investments and developments, private equity, and sukuk and Islamic funds.
“At its core it’s a charity and endowment which will invest in a wide range of asset classes to deliver competitive returns,” said Choudhury. “Those asset classes will include both commercial and social enterprise.”
OET’s first investment is a £1.75 million 21 residential apartments with planning for four more in Creative Lofts in the Yorshire town of Huddersfield. The Islamic Development Bank’s waqf department provided 75% of financing for the overall project. OET expects to exchange this month and complete the deal by May. The project is expected to offer a yield of 9%.
The returns generated from OET’s portfolio of assets will cover the Trust’s costs and also be reinvested in designated social projects with partners. OET expects to begin investing in social projects particularly in the area of social care in 2022.
“Returns will be reinvested or fund grants for capacity building social projects. “Members will have significant input into the grant giving process – democratising, if you like, giving donors the say where their money is going,” said Sultan Choudhury.
He said that in the future the OET plans to facilitate co-investment in some assets.
“If there is a co-investor and our assets return 8%, then at least 1% will be invested into OET projects through a management fee,” he said.
He added that OET would consider assets in the non-real estate sectors like taking equity in private ventures in the halal food sector, and social ventures such as enterprises aiming to provide affordable care homes.
Courtesy by :https://salaamgateway.com/