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The MCCA Ltd. Board of Directors is comprised as follows – Dr. Akhtar Kalam (Chairman), Dr. Zuhair Segu, Dr. Abdul Khair Jalaluddin, Dr. Zehdi Ferkh, Dr. Aladin Zayegh, Mr. Hyder Gulam and Mr. Mohammad Helmy.
 
MCCA started business in 1989 as a registered cooperative in the inner Melbourne suburb of Burwood with $20,000 and a vision to address the financial, banking and investment needs of the Australian Muslim community by offering Shariah-compliant housing mortgage loan products.
 
In 2010 MCCA celebrated its 21st birthday – a significant milestone for the business and a testament to its steadfast commitment to the organisation’s vision and values of Integrity, Excellence, Innovation, Faith and People.
 
In 2009 MCCA developed and launched the ASIC regulated MCCA Income Fund in response to a growing demand within the Australian Muslim community for a Shariah compliant investment based on ethical investing principles as an alternative to traditional / mainstream investments.
 
New product development plans are well advanced and MCCA Group is on target to release three new Shariah compliant products by the second quarter of 2011 –

• Property Trust
• Superannuation Trust
• Equity Trust
   

During his AGM address Dr. Zayegh also made mention of the Australian Taxation Board Review that is currently underway.
 
Dr. Zayegh said he welcomed the Review and hoped that it will address many of the anomalies that have adversely impacted on Islamic Finance and future Islamic Banking products and product development / innovation.

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Andrew Gordon, head of BNY Mellon’s Alternative Investment Services in Asia looks at the pressures impacting the hedge fund and private equity industry and what the drivers of growth are in 2011.

“The global low interest rate environment is driving institutional investors and pension funds to seek alternative sources of returns, driving an increase in appetite for alternatives in emerging markets, especially in Asia.

“In what could perhaps be described as a relatively tougher capital raising environment for hedge funds globally, 2010 saw the continuation of a paradigm change in the industry – where large institutions, especially those in Asia, including Japan, Australia, New Zealand and India, as well as the rest of the world are focusing an increased degree of attention on hedge fund opportunities, with increasing numbers of investors making their first investments in the alternatives space in the region – and this is a trend that is expected to continue well into 2011.

“An increasing number of large institutions including sovereign wealth funds, pension funds and life insurance companies are shifting their allocations to alternatives, as they seek better returns and portfolio diversification. The majority of those who have not done so are also actively looking around to identify the right fund managers to invest with.  In addition to the funds’ investment track record, what attracts these large institutions would be the business and operational track records of fund managers and the level of transparency that they can provide to their investors in terms of day-to-day reporting.

Transparency and risk management increasingly top of institutions lists

“Global investors continue to invest time and resources in the due diligence process with hedge funds in the region, looking into non-investment aspects of the managers including corporate governance, transparency and risk management.  This trend is likely to accelerate in 2011 as a number of high profile funds folded during the first half of 2010 and a multitude of insider trading cases emerged in the latter half.

“Investors, especially large global institutions, are looking to gain increased insight into their fund managers, looking beyond the traditional aspects of performance data to get into the bottom of how sustainable the team, business and strategies are. Looking through 2011, we believe we will be seeing more robust outlook and increased capital raising activities in those Asian hedge fund managers who have invested or are willing to invest in institutionalising themselves, that is, building up the infrastructure of their business for greater transparency, corporate governance and risk management, and making sure these insights are accessible to investors.

“The global hedge fund industry is institutionalizing and this trend is moving from the U.S. and Europe rapidly into Asia. This is what we believe will eventually and effectively differentiate winners from losers in the marketplace, specifically for those smaller hedge funds from the region. Post financial crisis, global hedge funds are also reviewing their presences in Asia, with a number opening offices in Hong Kong and Singapore, competition intensifies more rapidly than ever.

Private equity expected to mirror hedge fund trends

“Many of the same investors are also active in private equity, and we see similar themes. We are talking to a number of large institutional allocators to private equity in many parts of Asia, and they are seeking help to standardise and manage the increased flow of information and data that they are increasingly demanding from their managers. As with hedge funds, they trust their mangers, but are looking for independent verification of the value that their managers are bringing to the portfolios they manage – whether a company that a private equity fund has purchased, or a listed security that a hedge fund manager has taken a position in.”

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Access to three new investment strategies

Russell has introduced three new sector strategies to its diversified portfolios – the Russsell Alpha Fund, the Russell Australian Shares Enhanced Income Fund and the Dexus Wholesale Property Fund (Dexus WPF).

The Russell Alpha Fund is designed to provide an absolute return above an Australian cash benchmark.

“By drawing on our global expertise in manager research across multiple asset classes and hedging market risk, the Alpha Fund isolates and delivers an absolute return stream from our highest conviction managers,” said Russell Portfolio Manager, Andrew Sneddon.

Russell’s recently launched Australian Shares Enhanced Income Fund has also been introduced to provide investors with an income-oriented strategy through exposure to securities with higher dividend yields.

The Dexus Wholesale Property Fund (Dexus WPF) is a portfolio of prime Australian unlisted property assets, diversified both regionally (assets in most major cities) and across sectors (office, retail and industrial).

“We believe this is an opportune time to partially rotate from our strongly performing REIT strategies and see this is an opportune time to establish a new position in Australian unlisted property,” Sneddon added.

A more tailored approach

The SAA changes mean that Russell’s diversified products will now be more tailored to the end-client with respect to liquidity and tax status. The Alpha Fund has been added across the suite of diversified products (pooled superannuation trust or PST, Tax Exempt and Fund) to enhance portfolio diversification, while the Russell Australian Shares Enhanced Income Fund has been introduced to the tax-exempt units only to generate income for non-tax paying investors.

In contrast, the Dexus WPF has been added only to the taxed PST units to provide further diversification for investors with an appetite for unlisted assets.

‘Right strategy, right time’ approach to alternatives

Over the last year Russell has materially increased its strategic asset allocation to alternatives in its flagship Balanced Opportunities Unit from near zero to around 10%. This has been rewarded with both its alternative fixed income strategy, the Global Strategic Yield, as well as the Russell Global Listed Infrastructure Fund -$A Hedged, which has returned more than 20% in the year to October 2010.

“High conviction active strategies such as the Russell Alpha Fund represent our ‘right strategy, right time’ approach to alternatives in the Russell Diversified portfolios,” Mr Sneddon concluded.

The following table provides a breakdown of Russell’s Diversified products.

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