Sidra Capital Launches Singapore-based VCC for Cross-Border Commodity Supply Chain Investments
January, 2024
Singapore– Sidra Capital, a leading Shari’ah-compliant asset management firm regulated by the Saudi Arabian Capital Market Authority, is delighted to announce the launch of its maiden Singapore-domiciled variable capital company, Sidra Asian Opportunities Investment I VCC (VCC).
In November 2023, the VCC was launched with an investment strategy focused on facilitating cross-border commodity supply chains via fully funded irrevocable Letters of Credit (LC). The VCC specifically targets the high demand for solid fuel produced by select Indonesian producers, valued for the intrinsic qualities of the commodity and reliability of the producers in delivering the expected quantity and quality to purchasers.
To enhance security, the underlying trades are secured end-to-end by USD-denominated LCs issued or confirmed by banks with strong credit ratings, which eliminates foreign exchange and payment risks. Furthermore, as the trades are structured as back-to-back purchases and sales of commodities rather than speculative trading, investors are not exposed to inventory and price risks.
Expressing his pleasure over the launch of the VCC, Mr. Hani Baothman, Chairman of Sidra Capital, said, “Sidra Capital is at the forefront of innovating private finance investment solutions, and the VCC is a natural progression in the process, taking advantage of Singapore’s robust legal framework and being home to major global financial institutions, as well as extensive double tax treaties with various jurisdictions, which ultimately benefit the fund investors.”
Furthermore, Mr. Baothman expressed Sidra Capital’s support for the Singapore government’s ambition to become a global Islamic Finance hub. The Shari’ah-compliant Singapore VCC is a unique investment proposition and a welcome addition to the local and regional asset management scene. Sidra Capital takes pride in its contribution towards the development of the Islamic Finance industry in Singapore.
The VCC is managed by Sidra Capital Pte Ltd, a wholly-owned subsidiary of Sidra Capital, which operates as a registered fund management company licensed by of the Monetary Authority of Singapore.
Sidra Capital has established itself as a pioneer of Islamic private finance in Saudi Arabia. Its portfolio includes a range of Shari’ah-compliant private finance investment solutions, such as the acclaimed Sidra Income Fund series and Sidra-Ancile Global Structured Trade Investment Fund.
