London-based RiverCrossing Capital Partners, a new Islamic investment firm, has launched its first product, a $125 million US real estate fund, as part of a plan to offer non-traditional asset classes to institutional investors in the Gulf.

The company employs a strategic co-investment model whereby it originates and structures cross border opportunities alongside specialised, best-in-class asset managers in the US and Europe in number of asset classes and sectors to include real estate, energy and infrastructure as well leasing, said a statement from RiverCrossing.

RiverCrossing Alternative Real Estate US, builds on this model, and has been established with Virtus Real Estate Capital, a leading US manager that has invested more than $2.3 billion in the domestic real estate market over the last decade.

The fund will invest in income-producing, cycle-resilient alternative real estate properties in senior housing, student housing, medical offices and self storage across various regions of the US, it added.

The fund will be co-managed by RiverCrossing and Virtus with the underlying assets managed by Virtus and its regional operating partners.

An initial $45 million close is being targeted for the end of the second quarter of 2014 with RiverCrossing and Virtus having already identified those assets to be acquired in a first tranche.

The fund, which will be offered to private investors (HNWIs and family offices), institutional investors (banks, wealth managers and corporates) and sovereign wealth funds with Islamic interest in the GCC, expects to deliver a net cash-on-cash yield of  8 per cent and net IRR of 12 per cent over a five-year period.

Based in the UK and with a branch office soon to be registered in the Dubai International Financial Centre (DIFC), RiverCrossing’s team, led by industry veterans Mohammed Abdulmalik and Asim Zafar, has an extensive track record of global deal origination and execution in the firm's core investment areas including real estate, as well as in Islamic structuring.

Commenting on the launch, chairman Mohammed Abdulmalik, said: "RiverCrossing is well positioned to respond to growing demand in the GCC for alternative, Shariah-compliant investments. Combining our global investment expertise with that of our network of specialised asset managers in the US and Europe, we are creating new opportunities for investors for diversification and exposure to high quality managers they may otherwise be unable to identify and access."

"The RiverCrossing Alternative Real Estate US fund is the first of these global co-investment opportunities that we have developed and which we are delighted to bring to our investors," he stated.

CEO Asim Zafar said despite the strong growth of Islamic finance, there continues to be a shortfall of supply for institutional-quality Islamic investments.

"We work with best-in-class managers and operators with proven track records in value creation. In doing so, we follow a rigorous investment process from strategy identification and partner selection to investment realization. To this process we bring both a critical view of global markets and a deep insight into the GCC region and its investor mind set," he added.-TradeArabia News Service