Criteria for Sharia-Compliant Private Equity Funds

TVM Capi­tal was able to announce the closing of its first Sharia-compli­­ant fund (see FYB-news). Congra­tu­la­ti­ons for this. And ask what distin­gu­is­hes such a fund from other private equity funds. — A Sharia-compli­­ant (Islam-compli­­ant) invest­ment is subject to certain invest­ment crite­ria. For exam­ple, an Islam fund is prohi­bi­ted from inves­t­ing in certain sectors or segments. These include the alco­hol and tobacco indus­tries, gambling and betting, erotica and the music indus­try, as well as conven­tio­nal banking, insu­rance and the arms trade. The prohi­bi­tion of inte­rest on money is based on the realiza­tion that money in itself does not create added value; it cannot realize a return on its own without conside­ra­tion. Ther­e­fore, the money must be inves­ted in the real economy.