It was announced on Wednesday that assets under management by Bahrain’s mutual funds industry surged by nearly 115% to over USD20bn between June 2007 and June 2008.
According to Central Bank of Bahrain (CBB) statistics, the number of funds registered and authorized with the CBB rose to 2,636 at the end of June 2008. The net asset value (NAV) of those funds totalled USD20.14bn.
This was up from 2,374 registered funds in June 2007, with assets under management totaling USD9.37bn.
“The growth in the number of funds and assets under management is indeed a reflection of the demand generated by regional and international investors” observed Mohammed Ayman Al Tajer, Director, Financial Institutions Supervision, at the CBB.
The recently released CBB figures further revealed that of the total assets of the fund industry, assets of foreign funds registered in Bahrain for sale rose 134% to USD13.34bn in June 2008, compared with USD5.69bn in June 2007. The number of such funds totaled 2,502 in June 2008, compared with 2,266 a year previously.
Mr Al Tajer suggested that the strong regulatory framework in place in Bahrain may have played a part in the surge in funds choosing to locate there, explaining that:
“We are observing a growing interest from regional specialized financial institutions that are actively involved in the structuring of mutual fund products in particular. While many of which are focused on investments based in the region, they find an added value in utilizing the Bahraini CIU (Collective Investment Undertaking) regulatory framework for the establishment of their CIU investment vehicles. This is due to the fact that the Bahraini CIU domiciled vehicle has established a reasonably tested track record for its efficiency and suitability.”
In June 2007, the CBB revamped CIU regulations, stressing at the time the importance of addressing key areas such as transparency.
The Central Bank has pledged to continue to consult with industry players on the development of CIU regulation, revealing that it intends in the near future to further impose a still greater level of corporate governance.
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