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Alkhabeer Diversified Income Traded Fund 2030 debuts on Tadawul today
Logo of Alkhabeer Diversified Income Traded Fund 2030
Alkhabeer Diversified Income Traded Fund 2030 will start trading on the Saudi Exchange (Tadawul) as a close-ended investment traded fund today, July 17, with the symbol 4702 and ISIN Code SA1620529F58.
The Shariah-compliant closed-ended traded investment fund was established in accordance with the applicable laws and regulations of the Shariah Supervisory Committee.
For more news and details on investment Funds
The fund is the first of its kind in the Kingdom in terms of the proposed plan for exit, as upon the expiry of the fund term in 2030, the net asset value will be distributed on unit holders at that time.
The fund’s investment objective is to generate periodic income for investors through investing in income-generating assets by way of an investment structure, which is compliant with the guidelines of the Shariah Supervisory Committee.
Alkhabeer Capital, the manager of Alkhabeer Diversified Income Fund 2030, earlier floated 100 million units, representing 100% of the fund’s capital, according to data available with Argaam.
The subscription period ran from April 28 until June 13, at an offer price of SAR 10.12 per unit (subscription fees and VAT inclusive) through the receiving entities.
A total of 5.01 million units were allocated to institutions. Meanwhile, as many as 25.54 million units were allotted to retail subscribers. A minimum of 100 units were first allocated to each individual subscriber, while the remainder was distributed pro-rata, with a 100% allocation rate.
The Capital Market Authority approved in March the offering of the fund's units on Tadawul.
|
Fund Information |
|
|
Fund Manager |
Alkhabeer Capital |
|
Fund’s Name, Type and Category |
Shariah-compliant closed-ended traded investment fund |
|
Investment Objective |
To generate periodic income for investors through investing in income-generating assets by way of an investment structure compliant with the guidelines of the Shariah Supervisory Committee. |
|
Target Fund Capital |
SAR 1 bln |
|
Number of Units |
100 mln |
|
Offering to Institutional Investors |
5% minimum of the offered units and 70% maximum. In case the offering was undersubscribed, the remaining units will be allocated to the public. |
|
Fund Term |
Six years as of the listing date in Tadawul on June 9, 2030, or July 7, 2030, if the term is extended |
|
Risk Level |
Investment in the fund involves a high level of risk |
|
Benchmark |
It is a composite index comprising 70% of the Dow Jones Sukuk Investment Grade Total Return +30% of the Secured Overnight Financing Rate for three months (SOFR 3M) |
|
Subscription Fees |
1% of the cash subscription amount to be paid upon subscription during the IPO period |
|
Fund Management Fees |
1% annually of NAV |
|
Dividend Payment Policy |
The fund will distribute dividends (if any) within 40 business days after the date of issue of the semi-annual or annual financial statements in each Gregorian year. The distributions (if any) will be announced within 10 business days after the date of issuing the financial statements |
The fund’s investment objective is to generate periodic income for investors through investing in income-generating assets, which is compliant with the guidelines of the Shariah Supervisory Committee.
The fund will invest in various income-generating asset types such as Sukuk, trade finance, senior secured loans, structured income notes, income funds and Murabaha.
|
Fund’s Primary Underlying Type(s) of Securities |
|
|
Investment Type |
Details |
|
Sukuk |
Investment shall be made in sovereign, quasi-sovereign or corporate Sukuk that are issued locally and internationally by way of a public offering or private placement, whether listed or unlisted, and comply with the Shariah guidelines |
|
Leasing Transactions |
Investment in leasing transactions shall be made through a diversified portfolio consisting of medium-term leasing contracts that are Shariah-compliant, used to supply different types of equipment in multiple sectors, spread across international markets outside Saudi Arabia, and subject to the laws and regulations issued by the financial and supervisory bodies regulating these markets |
|
Trade Finance Transactions |
Investment in trade finance transactions shall be made through a diversified portfolio of short-term and asset-backed and/or insurance-backed trade finance transactions. They shall be Shariah-compliant spread across international markets outside Saudi Arabia, and subject to the laws and regulations issued by the financial and supervisory bodies regulating these markets |
|
Structured Income Notes |
Investment in credit securities issued by governments and/or companies, or through private finance transactions executed in global markets outside Saudi Arabia, by way of a Shariah-compliant structure. |
|
Senior Secured Loans |
Investment in senior secured loans shall be by way of structured financing tranches. These are securities comprised of senior secured loans of different investment grades and different preferences in the accrual of returns. They include corporate loans to diverse companies in terms of activities and sectors. They are granted by brokers outside Saudi Arabia. |
|
Income Funds |
Investment shall be made in income funds that are managed by fund managers |
|
Murabaha Transactions |
The fund manager may invest in Murabaha directly with local, regional or international banks with investment-grade credit and regulated by the Saudi Central Bank or a comparable regulatory authority in case of investment outside Saudi Arabia. |
The fund manager acknowledges that the trade finance, leasing and private finance transactions do not conflict with the investment funds regulations, other regulations and any law in effect in the Kingdom, including the special instructions on the direct financing investment funds.
Alkhabeer Capital further acknowledges that the Murabaha transactions executed by the fund manager will be entered into with counterparties in which the fund manager or its affiliates are not parties.
|
Fund Investment Concentration Locally, Abroad |
||||
|
Investment Type |
In Saudi Arabia |
Abroad |
||
|
Minimum |
Maximum |
Minimum |
Maximum |
|
|
Sukuk* |
-- |
100% |
-- |
100% |
|
Trade Finance Transactions |
-- |
-- |
-- |
100% |
|
Leasing Transactions |
-- |
-- |
-- |
100% |
|
Senior Secured Loans |
-- |
-- |
-- |
100% |
|
Structured Income Notes |
-- |
-- |
-- |
100% |
|
Income Funds * |
-- |
100% |
-- |
100% |
|
Murabaha Transactions* |
-- |
100% |
-- |
100% |
The table below shows the percentage of investment in each field:
|
Percentages of Investment Types |
||
|
Investment Type |
Minimum |
Maximum*** |
|
Sukuk |
-- |
40% |
|
Trade Finance Transactions |
-- |
40% |
|
Leasing Transactions |
-- |
40% |
|
Senior Secured Loans |
-- |
40% |
|
Structured Income Notes |
-- |
40% |
|
Income Funds * |
-- |
25% |
|
Cash & Murabaha Transactions** |
-- |
20% |
**In normal circumstances, the fund manager will not hold cash or invest in Murabaha transactions in excess of 20% of the fund’s net asset value (NAV). However, in case of the sale of some investments (until the cash is re-invested), or in exceptional cases, the allocation to cash and Murabaha transactions may be increased up to 100% of the fund’s NAV.
***In the event any of the target asset types exceeds its investment limit due to changes in underlying asset valuations caused by market changes, the fund manager shall be entitled not to rebalance the portfolio in line with the limits specified in the table above.
According to the prospectus, the maximum investment limits shall not be binding to the fund manager starting from the end of the fifth year after the listing date, as the fund manager shall concentrate investments in short term assets and/or liquid assets to ensure exit at the end of the fund’s term.
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