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was in the best interest of its unit holders. In 2019, all Limited Partners of the UIF unanimously approved the Winding-UpandTerminationPlan(WTP)tocommence a systematic process of terminating and winding up the operations and investments of the Fund.
The most notable achievement to date under the WTP is the fact that the fund (ICD on behalf of the Fund) has distributed USD 86.2 million to investors (conveying cumulative equity divestments, cumulative active collections from underlying loans and excess cash), which represents approximately 66% of
the total units under the UIF WTP initial two-year Divestment and Asset Disposal Period (DADP). Despite the repercussions associated with a challenging macroeconomic climate and the COVID-19 pandemic in 2020, the Fund Manager has successfully achieved year-to-date cumulative collections of USD 35.7 million composed of USD 31.0 million of Debt Collections and USD 4.7 million of Equity Divestment. The fund closed the year with assets under management (AUM) of about USD 24.0 million.
Taking into consideration the ICD UIF Winding-Up and Termination Plan (WTP) and the imminent expiration
of the DADP in 2021, the ICD in its capacity as Fund Manager of UIF is currently seeking proposals from reputable firms for appointment as independent advisors of the Fund to, inter alia, serve the unitholders in the assessment, initiation, management and liquidation of the remnant ICD UIF illiquid asset and
to seek due closure of the Fund with the regulatory authorities.
3.7.1.2 ICD Money Market Fund (MMF)
ICD launched the Money Market Fund (MMF) as a USD 50 million seed investment in September 2013. The Fund is a central liquidity solution catered to investors and institutions seeking highly liquid near- term instruments and short-term capital preservation and income growth. The Fund invests in short-term bank placements and low to moderate risk income- generating instruments and portfolios such as
the premium (yet low) allocation to Sukuks for an attractive yield bump.
ICD implemented a sound
reduced-risk core focused strategy within the Fund by significantly reducing its credit risk exposure.
Positioned as a moderate-yield money market fund, MMF has outperformed treasury funds in its category, generating returns well above its target return within its first few years of operation. This success led to a surge in capital raised from third-party investors as it grew its AUM to approximately USD 268 million, representing
a 5.8x multiplier on invested capital by Q1 of 2016. Within the same year, ICD MMF was awarded ‘Best Shari’ah Compliant Open-Ended High-Yield Income Fund (Since Inception)’ and ‘Most Innovative Asset Management Firm 2016, APAC– MEA Region’ by Wealth & Finance International. Since inception the Fund has achieved disbursements of USD 3.0 billion across a diversified base, thanks to a well-crafted asset allocation strategy, risk framework, experienced portfolio management team and dedicated investor relations team capable of reaching targeted institutions. Despite the outperformance, the Fund was unfortunately impacted by two losses in EY2018: a loss related to
a developer and a secondary loss due to a Shari’ah compliant restricted Wakala engagement as related
to an agent and sponsor.
At present, the Fund looks forward to enhancing
its branding, investment policies and governance frameworks to continue to attract investors to achieve its past AUM. With a challenging macroeconomic climate and pandemic repercussions, ICD implemented a sound reduced-risk core focused strategy within the Fund by significantly reducing its credit risk exposure, accepting modest returns while reducing the Fund’s risk profile. This was done to protect investors first
and foremost against any downside risks by investing in short-term placements and low-risk transactions
with attractive yield. The Fund ended the year with an AUM of about USD 85.4 million and a gross return of 3.5%, outperforming its target despite prudent and conservative management within the year.
OUR OPERATIONS, ACTIVITIES AND PERFORMANCE: 2021 HIGHLIGHTS
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