UK’s NEST begins search for Sharia-compliant fund manager

New workplace DC fund gets Islamic option

The UK’s new workplace pensions scheme NEST Corp. has launched its search for a Sharia-compliant global equity fund manager.

NEST, the National Employment Savings Trust, is predicted to grow into one of the largest defined contribution pension schemes in the European Union. It’s gearing up for launch later this year; high volumes of employers and members are expected from 2012.

There will be a default fund, a socially responsible investment fund and now a Sharia-compliant fund.

“NEST is seeking to include a passive or actively managed Sharia compliant global equity investment option as part of its optional suite of investment funds in order to fully provide for the needs of scheme members,” NEST said, adding: “The fund proposed must be suitable for a defined contribution (DC) based UK pension scheme.”It said it would not include any asset classes forbidden under Sharia law such as conventional bonds – and that wants the successful bidder to have their products approved by a Board of Sharia Scholars.

NEST will conduct the selection process using in-house expertise, producing a shortlist of managers for a beauty parade. Then advisors will help it make the final selection.

The deadline for submitting completed responses is February 4, with the successful fund manager set to be announced by March 2011. The fund itself will be on offer to members when NEST is launched later this year.

NEST added it would continue to explore the market in Islamic investment products to help it “meet the risk/return expectations of our members”. Website