Earnst and Young Islamic Fund Report

Surviving and adapting in a downturn
Dear Investments Industry Leader,
On behalf of MEGA, it is with great pleasure that we introduce the 3rd annual edition of the Ernst & Young Islamic Funds & Investments Report (IFIR 2009),
which has rapidly established itself as an indispensable reference source for decision-makers in the industry.
Launched at the 5th Annual World Islamic Funds & Capital Markets Conference (WIFCMC 2009) held in Bahrain on the 25th and 26th of May 2009, this year’s Report
could not come at a more critical time as the global financial markets undergo a seismic shift. IFIR 2009 reflects the measures that the leading industry players are
taking as they seek to strengthen their market positions and renew growth strategies against the backdrop of the ongoing fall-out from the global economic crisis.
Notwithstanding the effects of the crisis in the international financial markets, major opportunities continue to exist for Islamic investments. This year’s Report will
probe how the Shari’ah-compliant funds industry can catalyse the next phase of growth, providing industry leaders with new insights as they seek to renew their
business strategies in a challenging global economic climate.
Our gratitude goes to leading audit and business advisory firm, Ernst & Young and their Islamic Financial Services Group led by Sameer Abdi, who have invested their
considerable international talent and resources in leading the research project and in developing the insights contained in this Report.
We hope that the content of this third annual edition of the Ernst & Young Islamic Funds & Investments Report will be useful in your own strategic planning activities
and will assist your organisation in its quest for success in this dynamic industry.
Yours sincerely,
David McLean
Managing Director
The 5th Annual World Islamic Funds & Capital Markets Conference
A MEGA Brand
Shaping the Future of the Islamic Finance Industry Since 1993

P.O. Box 72045, Dubai, UAE | t. +9714 343 1200 | f+971 4 343 6003
www.megaevents.net
MEGA Brands. MEGA Clients. Market Leaders.
1
Islamic Funds and Investments
Report 2009
Surviving and adapting in a downturn
Disclaimer
The contents of the Islamic Funds and Investments Report 2009 are based on qualitative comments and hence provide a subjective assessment of
the current market. All quantitative comments are based on published information wherever possible. Where published reliable data was not
available, qualitative comments were made which may or may not reflect the true state of affairs. Information has been assimilated from secondary
sources, including published country, industry and institutional information, and primary sources, in the form of interviews with industry executives.
We are not expressing any assurance on the accuracy or completeness of the information obtained. Although this report has been documented
based on our understanding of Islamic financing activities to include only those activities that are deemed Shari’a compliant, no Shari’a opinion
whatsoever has been taken on this report. Hence, the contents of this report, in terms of the activities to be carried out, might not necessarily be
consistent with Shari’a in all cases, and the opinion of at least one Shari’a scholar should be taken before any further steps are made to implement
suggestions made in the report.
Whilst every care has been taken in the preparation of this report, no responsibility is taken by Ernst & Young as to the accuracy or completeness
of the data used or consequent conclusions based on that data, due to the respective uncertainties associated with any assumptions that have
been made.
This report was documented for the Islamic Funds and Capital Markets Conference 2009. No part of this document may be republished,
distributed, retransmitted, cited or quoted to anyone without prior written permission from MEGA Events and Ernst & Young.
3
Contents
1. Introduction 6
2. Macroeconomic Conditions 11
3. Asset Classes and Products 20
4. Key Investment Segments 30
5. Competition and Business Models 50
6. Key Business Risks 58
7. Conclusions 68
4 MEGA Brands. MEGA Clients. Market Leaders. | Shaping the Future of the Islamic Finance Industry Since 1993
Introduction to the Islamic Funds and Investment Report 2009
Dear Investment Executive
On behalf of Ernst & Young, I would like to take this opportunity to introduce you to the Ernst & Young Islamic Funds and
Investments Report 2009.
The financial crisis over the past year has seen unprecedented turmoil in global financial markets. Panic and volatility
within global equity markets have pushed equity values to historical lows. Coupled with a correction in real estate prices,
this has forced investors to reconsider their choice of Islamic asset manager as well as asset allocation strategy.
IFIR 2008 highlighted the phenomenal rate of growth experienced in the Islamic asset management industry. The
landscape has changed significantly as the global economic crisis has taken hold. IFIR 2009 seeks to revisit the findings
of IFIR 2008, address the changes, and provide explanations.
Despite this setback, the fundamentals of the Islamic fund industry remain strong. With almost US$50 billion in fund assets
under management and a large, expanding and untapped Muslim population, there are likely to be considerable
opportunities in the future.
This is a time when strategic choices have to be made and market participants have to adapt to survive. I hope that this
report will serve as a catalyst by helping market participants formulate both ideas and the means to meet the challenges
that are prevalent in the current economic climate.
Sameer Abdi
Advisory Partner
Ernst & Young
5
1. Introduction
Over the past year, there has been considerable activity in the Islamic funds market,
including unique fund launches and regulatory changes
October January 2009

May September Asian Finance The Securities and February
July
Bank and Corston- Exchange Board of
ABN Amro Clifford Chance IFSB adopt new
June The Dow Jones advise on first ever
Smith Asset India approves India’s
standard (IFSB 6)
launches a 4 year Islamic Market Management sign first Islamic mutual
Shari’a compliant Bursa Malaysia securitization of Guiding Principles on
March 2008 GCC Index and the installment sales distribution fund
investment product announces plans Governance for
S&P GCC 40 index receivables in the agreement for January
AAOFI issues in the Middle East to launch palm oil- Islamic Collective
are launched world’s first Shari’a
new set of rules with a focus on the based commodity form of Sukuk Dubai Shari’a Hedge Schemes
corporate
on sale of Sukuk energy and basic murabaha and certificates Fund Index, the first
governance fund,
resources sectors Islamic securities to give GCC internationally
borrowing and August recognized Islamic
investors
April lending opportunity to hedge fund index, is
Deutsche Bank’s launched
Jadwa Investment June ETF platform lists
invest in major February
ASEAN markets January
introduces three Islamic Shari’a compliant its first Shari’a October Eiger Green Coffee
funds of funds investment index compliant ETFs on November The Falcom Shari’a Fund is launched
the London Stock Encore and
launched in India index, the largest
Exchange Sumou Holding Insynergy Asset
to encourage more Shari’a compliant
launch first Saudi Management
GCC investments index in terms of
Islamic REIT; fund launches UK’s first
companies in the
could reach Shari’a complaint
GCC, is launched
US$1.3b equity fund
November
March May June August October IFSB approves two January
Jadwa Indonesia launches exposure drafts:
Dubai Financial Market Saudi Arabia’s CMA CIMB Islamic Bank Scottish Widows
Investment the International Capital Adequacy
issues first Islamic allows foreign launches FXOP-I, Investment
Requirements for
standards on trading of launches Center for investors to buy which allows Partnership and Manar March
Africa’s first Development in Sukuk Securitizations
shares on DFM listed shares customers to Financial Investment Nasdaq Dubai begins
Shari’a Islamic Finance, a and Real Estate
through swap hedge their foreign agree to set up SWIP listing Dubai Gold
compliant regulatory body Investments and
agreements exchange risk Saudi Asset Securities, an Islamic
investment, the Guiding Principles on
Management exchange-traded
Africa Fund July Governance of Islamic
October Collective Investments commodity
First Islamic venture Schemes
capital fund is International January
launched by Islamic Financial
Malaysia Venture Market launches Fairfax Middle East
Capital Management first standardized launches an Islamic
master agreement Russian property fund
for treasury worth US$500m
placement in
Islamic finance
Source: Islamic Finance News, Ernst & Young analysis Note: This timeline is not exhaustive and intends to provide only a summary of major events
7
However, growth has stalled from historical highs
Global Islamic Funds Industry

Estimated AuM (US$b) Number of funds
50 800
43 44
45 41 700
40
34 600
35
29 500
30
23
25 400
20
20 300
15
200
10
5 100
0 0
2003 2004 2005 2006 2007 2008 Q1 2009
Assets under management (AuM) Number of Islamic funds
Source: Eurekahedge, Zawya, Ernst & Young analysis
Whilst the number of new funds launched has declined and the number of funds
being liquidated has risen
Global Islamic Funds - Annual Launches and Liquidations
Number of
funds
173
180
160
140
120
98
100
78
80
60
40
19
20 11 11
7 6
0
2006 2007 2008 Q1 2009
Number of Islamic funds launched Number of Islamic funds liquidated
Source: Zawya, Eurekahedge, Ernst & Young analysis
9
Islamic asset management has been impacted by the global recession - in order to
survive the current downturn, participants will need to adapt
Macro Asset
economic Classes and
Conditions Products
Islamic Asset
Key Management
Key Investor
Business
Segments
Risks
Competition &
Business
Models
2. Macroeconomic Conditions
GCC and Asia have not been immune to the global recession - liquidity is now
subsiding
Macro Asset
Economic Classes &
Conditions Products
Islamic Asset
5. KeyrecessionManagement
The global has led to market3.corrections
Investor
Business
and global assets under management Segments
has shrunk for
Risks
the first time since 2002
GCC and Asia have4.not been insulated from the
Competition
downturn & Business
Reduced oil revenues and Models
a drop in global trade flows
have decreased economic output in the GCC and
Asia respectively
13
9-Mar-09
9-Jan-09
Index return = -50%
9-Nov-08
9-Sep-08
9-Jul-08
The global recession has resulted in a severe market correction
9-May-08
9-Mar-08
9-Jan-08
9-Nov-07
9-Sep-07
The MSCI World Index
9-Jul-07
9-May-07
9-Mar-07
9-Jan-07
9-Nov-06
9-Sep-06
Index return = 40%
9-Jul-06
9-May-06
9-Mar-06
9-Jan-06
9-Nov-05
9-Sep-05
9-Jul-05
Index level
9-May-05
Source: MSCI
1,700
1,500
1,300
1,100
900
700
500
As a result, the global asset management industry has experienced its first decline
(in AuM) since 2002
Global Asset Management Industry
Number of funds
Estimated AuM US$
(‘000)
trillion
30 80
Dot-com Crisis Financial Crisis
26.2
70
25
2003-2007 AuM CAGR = 18% 21.8 21.7
60
20 17.7
50
16.2
14
15 40
11.8 11.6 11.3
30
10
20
5
10
0 0
2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008
Worldwide Total Net Assets of Mutual Funds Worldwide Total Number of Mutual Funds
Source: National Mutual Funds Association, Ernst & Young analysis Note: The data is for 44 countries
A sharp fall in oil prices is expected to cause a significant reduction in economic
growth across the GCC
Global Average Crude Oil Price and Total Nominal GDP in the GCC
US$ billion US$ per barrel
140
1,200
1,030 1,033
120
1,000 908
824 813 100
800 737
623 80
600 483 60
405
400 40
200 20
0 0
2003 2004 2005 2006 2007 2008 2009e 2010e 2011e
Nominal GDP (US$b) Global Average Crude Oil Price (US$)
Source: Global Insight, Qwest Investment Management, Ernst & Young analysis
15
Consequently, GCC government surpluses are expected to decrease
Global Average Crude Oil Price and Current Account Balances of Governments in the GCC
140
350
288 120
300
100
250
204 195 80
200 163
60
150 114
90 96
40
100 83
52
50 20
0 0
2003 2004 2005 2006 2007 2008 2009e 2010e 2011e

Current Account Balance (US$b) Global Average Crude Oil Price (US$)
Liquidity growth in the GCC will slow
Global Average Crude Oil Price and Total M1 Liquidity in the GCC
140
300
243 120
250 229
219
210 100
200 185
80
143
150 129
113 60
92
100 40
50 20
0 0
2003 2004 2005 2006 2007 2008 2009e 2010e 2011e
M1 Money Supply (US$b) Global Average Crude Oil Price (US$)
17
Meanwhile, countries in South East Asia are experiencing a slowdown in both
exports and domestic demand, reducing economic output
Combined Merchandise Exports, Imports and Nominal GDP in Malaysia and Indonesia
US$ billion
900 822
800 733 724
700 656
619
600 521
500 424
382
400 345
300
200
100
0
2003 2004 2005 2006 2007 2008 2009e 2010e 2011e
Nominal GDP (US$b) Merchandise Imports (US$b) Merchandise Exports (US$b)
Source: Global Insight, Datamonitor, Ernst & Young analysis
Reduced economic activity, coupled with a drop in bank financing, has resulted in
reduced money supply growth
Total M1 Liquidity in Malaysia and Indonesia
US$ billion
140 129
115
120
100 103 101
100
78
80
59 62
60 53
40
20
0
2003 2004 2005 2006 2007 2008 2009e 2010e 2011e
M1 Money Supply (US$b)
Source: Global Insight, Ernst & Young analysis
19
3. Asset Classes and Products
Asset classes have been adversely affected by the global recession - liquidity and
stability have become key investment criteria
Macro Asset
Economic Classes &
Conditions Products
Islamic Asset
5. Key Management
3. Investor
AssetBusiness
classes, particularly equities andSegments
real estate,
Risks
have been adversely affected by the global recession
Asset classes that offer liquidity and low volatility have
4. Competition
gained in popularity & Business
Models
21
Geographic (Middle East) and asset class (equities) concentration remains high
Islamic Asset Distribution (Funds Size US$ million)
82
10,141
1,373 2,906 1,433
Equity 279
39
Fixed Income 5,504 856
Cash 1,971 2,658 409
85
Real Estate and 3,431 253 1,021 406
Private Equity
Commodities 462 3,437
Balanced 291 266 423
Other 1,463 262 288 568
Middle East Global Asia North Emerging Europe

and Africa America Markets
Source: Eurekahedge, Zawya, Ernst & Young analysis Note: Bubble size denotes the size of the funds in US$ million
Equity asset classes have performed poorly in 2008 - volatility continues
Islamic Indices Islamic Equity Funds - Average Returns

Index level DJ US Islamic Global Islamic Top Quartile Average Return Average Return
100%
60%
51.7%
50%
80%
40%
60% 27.0%
30%
23.0%
20%
40%
10% 4.8%
3.4%
20% 0%
-3.7%
2006 2007 2008 Q1 2009
-10%
0% -20%
Jan-05
Apr-05
Oct-05
Jan-06
Oct-06
Jan-07
Oct-07
Jan-08
Oct-08
Jan-09
Jul-05
Apr-06
Jul-06
Apr-07
Jul-07
Apr-08
Jul-08
Apr-09
-20.9%
-30%
-20%
-40% -39.0%
-40% -50%
“There’s a herd mentality in the market at the moment. Investors are panicking and trying
to redeem their investments, driving down markets further."
“Prices are bottoming out and we expect people to start coming back to the market and take advantage
of historically low prices."
Corporate interviews
Source: Zawya, Eurekahedge, Ernst & Young analysis Note: Data includes returns of 245 funds
23
Sukuk issuance has slowed as widening spreads are making returns more attractive
Global Sukuk Issuance Islamic Fixed Income Funds - Average Returns

Middle East Rest of World Top Quartile Average Return Average Return
US$m
9% 9%
47,099
50,000 8%
8%
7% 7%
40,000
6%
30,000 27,167 27,512 5%
4% 4% 4%
20,000 15,516 3% 3%
10,758 2%
10,000 5,817 7,210
1% 1% 1%
986
0%
0
2006 2007 2008 Q1 2009
2002 2003 2004 2005 2006 2007 2008 2009e*
*Deals announced
“The Dubai government recently issued a bond with CDS spreads now approaching 600bps. Can you imagine what a Gulf-based corporate
bond issuance would be like?"
“Some of the first issued Sukuk is approaching maturity. For the first time, we’re expecting renegotiation of terms. Nobody is lending and rather
than see a default - banks will be prepared to negotiate."
Source: IFIS, Zawya Sukuk Monitor, Eurekahedge, Ernst & Young analysis Note: Data includes returns of 34 funds
Commodity prices declined during the second half of 2008, but signs of recovery are
emerging and returns in Q1 2009 have been strong
Merrill Lynch Commodity Excess Return Index Islamic Commodity Funds - Average Returns
Index level Top Quartile Average Return Average Return
900
30%
800 23.2%
25%
21.2%
700
20%
600 15%
10.5% 10.0%
500 10%
400 5% 2.2% 1.8%
300 0% 2.2%
2006 2007 2008 Q1 2009

200 -5%
100 -10%
0 -15%
3-Nov-05
3-Nov-06
3-Nov-07
3-Nov-08
3-Jan-05
3-Jan-06
3-Jan-07
3-Jan-08
3-Jul-05
3-Jan-09
3-Jul-06
3-Jul-07
3-Jul-08
3-Mar-05
3-May-05
3-Sep-05
3-Mar-06
3-May-06
3-Sep-06
3-Mar-07
3-May-07
3-Sep-07
3-Mar-08
3-May-08
3-Sep-08
3-Mar-09
-20% -20.1%
-25%
“When oil prices were high, we were booming. Now, with oil prices hovering at $50 a barrel, the golden era of the Middle East is over."
“Last year, agribusiness was in fashion. Every manager I know wanted to get into agriculture in some shape or form. This year, it’s all changed
again."
Source: Merrill Lynch, Eurekahedge, Zawya, Ernst & Young analysis Note: Data includes returns of 12 funds
25
Increased volatility has made cash funds a popular asset class amongst investors
3 Month LIBOR Islamic Cash Funds - Average Returns

6 Top Quartile Average Return Average Return
5.5 14%
5 12.2%
4.5 12%
10.5%
4
10%
Percent age
3.5
3
8% 7.2%
2.5
`
2 6% 5.2%
1.5
3.9%
1 4% 3.4%
0.5 1.8%
2%
0
0.7%
J an-0 2
A pr-0 2
J ul-0 2
Oct -0 2
J an-0 3
A pr-0 3
J ul-0 3
Oct -0 3
J an-0 4
A pr-0 4
J ul-0 4
Oct -0 4
J an-0 5
A pr-0 5
J ul-0 5
Oct -0 5
J an-0 6
A pr-0 6
J ul-0 6
Oct -0 6
J an-0 7
A pr-0 7
J ul-0 7
Oct -0 7
J an-0 8
A pr-0 8
J ul-0 8
Oct -0 8
J an-0 9
A pr-0 9
0%
2006 2007 2008 Q1 2009
“In times of volatility and uncertainty, people are looking for safer and less volatile investment avenues."
“Investors want to invest in something where they will not lose money. They have been badly burnt and want to be protected.“
Source: Bloomberg, Eurekahedge, Zawya, Ernst & Young analysis Note: Data includes returns of 49 funds
Real estate funds have been affected by falling real estate prices
Global REIT Index Islamic Real Estate Funds - Average Returns

250 Top Quartile Average Return Average Return
30% 28%
200 25%
21%
20%
150
15% 13%
11%
10% 8%
100
5%
50
0%
2006 2007 2008 Q1 2009
-5% -5%
0 -5%
-10%
2-Nov-08
2-Mar-09
2-Mar-06
2-Sep-06
2-Nov-06
2-Mar-07
2-Sep-07
2-Nov-07
2-Mar-08
2-Sep-08
2-May-08
2-May-06
2-May-07
2-Jan-06
2-Jan-07
2-Jan-08
2-Jan-09
2-Jul-06
2-Jul-07
2-Jul-08
-11%
-15%
“We never invested in real estate. We knew it was a bubble and we were just waiting for it to burst.“
“Demand for low end housing will probably stay the same but typically developments are aimed at the high end of the market. This is where the
pain has been keenly felt."
Source: Global Business Monitor International, Eurekahedge, Zawya, Ernst & Young analysis Note: Data includes returns of 17 funds
27
The Middle East and Africa, Asia and Global mandates account for the vast majority
of all Islamic funds
Target Market of Annually Launched Global Islamic Funds (Number of Funds)
100%
6% 7% 7%
6% 6% Emerging Markets
90% 6% 4%
4%
12% 6%
80% 20%
Europe
70% 27%
26%
60%
25%
North America
32%
50%
40% 32% Global

30%
30%
51% Middle East and
20% 39% Africa
10% 25% 26%
Asia
0%
2004 2006 2008 2009e
Source: Zawya, Eurekahedge, Ernst & Young analysis Note: The above analysis includes 496 Islamic funds for which data was available
Shari’a compliant asset classes have experienced turmoil and volatility
How asset classes performed - 2009 and 2008 results
Equities
Equities Fixed
Fixed Income
Income Cash
Cash Commodities
Commodities Real
Real Estate
Estate Private
Private Equity
Equity
Large
Large outflows
outflows Moderate
Moderate inflows
inflows Moderate
Moderate inflows
inflows Large
Large outflows
outflows Moderate
Moderate outflows
outflows Moderate
Moderate outflows
outflows
Large
Large corrections
corrections Decrease
Decrease in
in Lower
Lower interest
interest Global
Global recession,
recession, Fall
Fall in
in valuations
valuations Distressed
Distressed and
and
in
in both
both mature
mature and
and corporate
corporate issues
issues rates
rates falling
falling demand
demand and
and Distressed
Distressed sales
sales secondary
secondary sales
sales of
of
emerging
emerging markets
markets Increase
Increase in
in Lower
Lower returns
returns corrections
corrections commitments
commitments
2008
2008
Continued
Continued volatility
volatility sovereign
sovereign issuance
issuance Increased risk
Increased risk Dry-powder
Dry-powder
Limited
Limited recovery
recovery Increased
Increased spreads
spreads resulting
resulting from
from
defaults
defaults
Moderate
Moderate inflows
inflows Moderate
Moderate inflows
inflows Flat
Flat Large
Large inflows
inflows Limited
Limited inflows
inflows Flat
Flat
Current
Current valuations
valuations Large
Large sovereign
sovereign Low
Low returns
returns Commodity
Commodity Current
Current valuations
valuations Distressed
Distressed assets
assets
appear
appear attractive
attractive issues
issues will
will create
create aa Increased
Increased rebound
rebound as
as global
global appear
appear attractive
attractive Increased
Increased
for
for long-term
long-term benchmark
benchmark yield
yield consideration
consideration of
of economy
economy recovers
recovers for
for long-term
long-term investments
investments
investors
investors curve
curve counterparty
counterparty risk
risk investors
investors Alternative
Alternative source
source
2009f
2009f
Active
Active Distressed
Distressed assets
assets of
of capital
capital
management
management will will Demand exists
Demand exists for
for
gain
gain prominence
prominence lower
lower end
end
as
as volatility
volatility is
is residential
residential projects
projects
expected
expected to to in
in the
the GCC
GCC
continue
continue
Source: Ernst & Young analysis
29
4. Key Investor Segments
The global recession has impacted investable wealth across investor segments and
resulted in a reallocation of assets
Investors have seen their investable wealth decline as

a result of the global downturn
1. Macro 2. Asset
Asset allocation has
Economic
changed to reflect new market
Classes &
realities - there has been a flight to
Conditions safety
Products
Islamic Asset
Key Management
Key Investor
Business
Segments
Risks
Competition
& Business
Models
31
Islamic asset management is concentrated in the GCC and Malaysia
Global Islamic Funds by Asset Manager (Q1 2009)
5 30 2
10
8
4 5
1
8 USA 1 1
~1,423 2
4 95
5 24 1 18
Islamic AuM 1
136 65
2
by Country 4
(US$b) Malaysia
2 2 ~4,579
164
10+
25 4
KSA Kuwait
1 – 10 26
~19,286 ~3,771
0.5 – 1
Bahrain UAE
0.1 - 0.5 ~1,238 ~5,524
1
8
0.01 – 0.1
Note: Funds per country include those managed by players headquartered in that respective jurisdiction. Boxes show total
Source: Eurekahedge, Zawya Funds Monitor, Ernst & Young analysis AuM of Islamic funds in US$ billion.
But there are still significant untapped markets in Asia and MENA
Global Estimated Muslim Populations in 2008
Turkey Iran
~71m ~64m
Egypt
~71m
Estimated Algeria Morocco

Muslim ~33m ~32m
Populations
in 2008
Indonesia
100m + ~207m
50 - 100m
Nigeria
10 – 50m ~64m
Pakistan India
5 – 10m ~160m ~151m
1 – 5m Bangladesh
~132m
Under 1m
Source: CIA World Fact book; Global Insight; Ernst & Young analysis Note: Muslim populations have been determined by applying percentages to 2008 population data.
33
There are seven significant investor segments in Islamic markets
Individual Quasi Institutional Institutional
Mass Affluent Awqaf and Endowments Takaful

Individuals with liquid wealth of Awqaf focus on long-term real estate With Shari’a compliance a necessity,
US$50k to US$500k and a high and cash holdings with Shari’a Takaful operators represent a growing
propensity to invest in Shari’a compliance being a necessity. part of the Islamic investor community.
compliant products.
University endowments are becoming
more prominent, with the main aim
being long term capital growth.
HNWI Sovereign Wealth Funds

Individuals with financial assets of at While SWFs investments have taken a
least US$1m. hit, they still represent a significant part
of the investment landscape.
In general, these individuals prefer
Shari’a compliant products, but it is not Most SWFs do not have a strictly
a compulsory pre-requisite. Islamic mandate but do adopt an ethical
investment strategy.
/
le
UHNWI ab Pension Funds
by i r
Propensity to consume
s y
ce
d le de sor
ly
Shari’a compliant
Individuals with financial assets in en rn ab gh mpu

l
Pension funds, as large institutional
flu er i
tu ef H
excess of US$30m. In re Pr Co investors, do not have a high propensity
to consume Islamic products. However,
Similar to the HNWI segment, these they are an increasingly important
individuals prefer Shari’a compliant investor class that do engage with
products, but it is not compulsory. Islamic financial institutions.
Mass Affluent: A growing segment that demands simple and liquid products
Market Size
Estimated Market Size

2008:
US$284 billion
Liquid assets held by mass affluent individuals (in US$ billion)
Estimated Change in
Market Size from 2007:
-20%
222
169 In 2008, the value of
147 liquid assets of mass
147 135
affluent individuals in the
GCC was US$135b. This
is expected to grow to
196 US$222b by 2013
187
137 157 149
Asian mass affluent
individuals had liquid
assets of US$149b in
2005 2006 2007 2008e 2013f
2008. This is expected to
grow to US$196b by 2013
GCC Asia
Note: Asia includes Malaysia, Pakistan and Indonesia

Growth rate of 5.6% assumed for Asia and 10.5% for the GCC (based on historical growth)
Source: Datamonitor Global Wealth Model, Ernst & Young analysis
Liquid assets include onshore assets excluding property and pension assets
35
Mass Affluent: A significant flight to safety has occurred
Asset Allocation
Between 70% and 90% of investors prefer Islamic products 15%

Shari’a Saudi investors are much more likely to demand Islamic investments
Sensitivity than investors from other GCC states 5%
55%
Small ticket appetite means investment is made almost exclusively

through mutual funds using local service providers
Product
Focus Desire for annuity and insurance linked products that require small
monthly contributions
Focus on simple, short tenor and safe products 5%
80%
The mass affluent segment has seen a significant flight to safety

Asset
Class Equities have experienced a large sell off
Funds are being moved to safer, shorter duration money market assets 40%
Allocation
Currently there is only a limited number of Islamic mutual funds with low
Product/ initial/minimum subscription requirements
Asset 2008 2009
Lack of mixed asset allocation through balanced mutual funds or
Class Gap exposure to international Islamic investments Equity Fixed Income
Cash/Money Market Real Estate
Alternatives
Source: Industry interviews, Ernst & Young analysis
HNWI and UHNWI: Segment seeking adequate returns and hassle-free redemption arrangements
Market Size
In 2008, the total wealth

of HNWI and UHNWI in
the Middle East was
US$1,400b. This is
Value of assets held by HNWI and UHNWI (in US$ trillion) expected to grow to
US$2,800b by 2013
Asian HNWI and UHNWI

had total wealth of
2.8
US$7,600b in 2008. This
is expected to grow to
1.7 US$11,100b by 2013
1.4
1.3 1.4
11.1
9.5
8.4
7.6 7.6
2005 2006 2007 2008e 2013f
Middle East Asia-Pacific
Growth rate of 7.9% assumed for Asia-Pacific and 15.3% for the Middle East (based
Source: Capgemini and Merrill Lynch World Wealth Report 2006, 2007, 2008; Ernst & Young analysis on historical growth rates)
37
HNWI and UHNWI: Segment has witnessed a sizeable decline in assets but growth is expected
Market Size

2008:
US$184 billion
Liquid assets held by HNWI and UHNWI (in US$ billion)
Estimated Change in
Market Size from 2007:
-20%
168
In 2008, the value of
124
liquid assets of HNWI and
107 99 UHNWI in the GCC was
106 US$99b. This is expected
to grow to US$168b by
2013
106 116
74 87 85
Asian HNWI and UHNWI
had liquid assets of
US$85b in 2008. This is
2005 2006 2007 2008e 2013f expected to grow to
US$116b by 2013
GCC Asia
Growth rate of 6.5% assumed for Asia-Pacific and 11.1% for the GCC (based on historical growth)
Asia includes Pakistan, Malaysia and Indonesia
Source: Datamonitor Global Wealth Model, Ernst & Young analysis
Liquid assets include all onshore assets excluding property and pension assets
HNWI and UHNWI: Seeking safe assets and capital preservation
Asset Allocation
Shari'a sensitivity depends on preference of the decision-maker

Between 70% and 90% of investors tend to prefer Islamic products 20% 20%
Shari’a Their public profile furthers their desire to invest in Islamic products,
Sensitivity particularly in more religious countries
Prepared to invest in conventional products when there is no viable 5%
Islamic alternative 15%
Unlikely to invest through mutual funds <5%

Utilise discretionary portfolios with specialised asset managers, both <5%
Product local and international, with whom relationships have been developed
Focus Big-ticket appetite allows access to structured products 50%
Will demand opt-out clauses when investments are made in
conventional products to avoid haram industries and excessive
leverage
60%
Witnessed a significant sell-off of equities and real estate assets as <5%
Asset steep price falls combined with high volatility has dampened their
Class appetite
Allocation 20%
Alternative investments have not been affected, possibly due to their
long-term nature and relatively illiquid markets
Money market assets have become the dominant asset class
Ijarah (leasing) investments, particularly with tenures of 6-12 months, 2008 2009
Product/ offer an attractive substitute for fixed income with reduced zakat Equity Fixed Income
Asset obligations
Class Gap Islamic alternative and real estate investments which target emerging
or mature international markets Alternatives
39
Awqaf & Endowments: Burgeoning new segment requiring capital preservation and fund
management
Market Size

The most notable Awqaf Name Country Waqf Type Sectors Invested in 2008:
specific foundations/bodies in
the GCC include: KAPF Kuwait Religious, Philanthropic
and Family
Financial services, real estate,
health, education and social
US$100 billion
Kuwait Awqaf Public services
Foundation (KAPF);
Awqaf and Minors AMAF UAE Religious and Financial services, real estate,
foundation (AMAF); Philanthropic education and social services Estimated Change in
Sharjah Awqaf General SAGS UAE Religious and Real estate, education and Market Size from 2007:
Trust (SAGS); Philanthropic social services
Qatar Endowment +10-20%
Authority (QEA); QEA Qatar Religious, Philanthropic Real estate, health, education
Ministry of Islamic Affairs,
and Family and social services
Endowments, Da’wah and

Guidance (MIAEDG); MIADEG KSA Religious, Philanthropic Real estate, health, education
Ministry of Religious
and Family and social services
Affairs (MARA); and

Ministry of Justice and MARA Oman Religious and Real estate, education and
Philanthropic social services
Islamic Affairs (MOJIA).
MOJIA Bahrain Religious and Real estate and social services
Philanthropic
Several Waqf funds have also been structured as endowment funds with the principal aim of
developing academic institutions.
1. The International Islamic University Malaysia (IIUM) Endowment Fund aims to raise fund to help students in their
studies.
2. The King Abdullah University of Science and Technology (KAUST) Endowment Fund has an endowment fund of
US$10 billion, considered to be the 6th largest endowment fund in the world.
3. Bahrain’s Waqf Fund for Research, Education and Training in Islamic Finance
The fund was established in March 2008 with capital of US$5.8 million.
Source: Ministries of Justice and Islamic Affairs, Foundation and Awqaf sites, press releases
Awqaf & Endowments: Real estate is the dominant asset class with a small allocation to equities
Asset Allocation
5% 5%
Shari’a Shari'a compliance is a necessity for Awqaf

Sensitivity Shari’a compliance is an important feature for the majority of
endowment funds
Invest in long term assets 80% 80%

Product Purchase real estate as part of their operations as they hold large
Focus amounts of land used for religious and philanthropic activities
Equities constitute a minor portion of assets
Asset allocation has remained static

Asset Awqaf have a large proportion of their assets invested in real estate 5% 5%
Class assets, with a focus on long-term holdings
Allocation 5% 5%
Endowment funds have witnessed a surge of assets in recent times,
10% 10%
with the main aim being long-term capital growth. Endowment funds
also have a large proportion of assets invested in real estate.
2008 2009
Product/ Equity Fixed Income
Asset Long-term fixed income investments
Class Gap
Alternatives
41
Takaful: Large institutional segment with liquid assets requiring Shari’a compliant products
Market Size
Global Gross Takaful Contributions (in US$ million) 3,768
20 Estimated Market Size
3,364 355 36
18 2008:
317 32
2,518 1,065 US$7.2 billion
11 951
215 Indian Sub-Continent
1,988 21
8 Levant
181 17 692 Estimated Change in
1,384 Africa
5 544 South-East Asia Market Size from 2007:
121 14
2,292 GCC
474 2,046 -15%
1,579
1,238
770
In 2008, the value of
2004 2005 2006 2007e 2008e investable assets of
Total Takaful Operators Investable Assets (US$ million) Takaful operators stood at
12,000 US$7.2b which is
expected to grow to
10,000 approximately US$11.2b
by 2012
8,000
Malaysia
6,000 GCC
Consolidated
4,000
2,000
Note: Total investable assets include: government
Islamic papers, Islamic private debt securities and
0 equity, other investments, foreign assets,
2005 2006 2007 2008e 2009f 2010f 2011f 2012f investment accounts and Islamic MM, cash and
bank balances and other assets.
GCC figures have been estimated by using a
sample of 8 GCC companies.
Source: Company annual reports, Bank Negara Malaysia Annual Takaful Statistics 2007, Ernst & Young analysis
A growth rate of 11.7% has been assumed.
Takaful: A significant sell-off of equities and a move to safer, more liquid assets
Asset Allocation
10% 10%
Shari'a compliance is a necessity
Shari’a A lack of depth in Islamic investments, particularly in the fixed income
Sensitivity asset class, forces many operators to reinsure large portions of their
risk
30%
40%
Due to the long-term nature of their obligations, this segment is drawn

to opportunities for capital appreciation
Product
Focus Equity investments made either through mutual funds or direct
participation
Islamic banks engaged for cash/deposits 20%
60%
In comparison to a year earlier, a greater proportion of Takaful

Asset operators assets have been moved to safe assets
30%
Class A significant sell-off of equities has occurred, with the subsequent
Allocation funds being placed in safer cash and money market funds
Limited real estate exposure
2008 2009
Liquid investments in fixed income asset classes
Asset Listed/tradable products that can be easily exited
Class Gap
Alternatives
Source: Industry interviews, Ernst & Young analysis Note: 2008 data is for the GCC only, 2009 data includes Malaysia
43
SWF: Large investor group utilizing only sophisticated and proven fund managers
Market Size
Value of assets (in US$ billion) Estimated Market Size
0 100 200 300 400 500 600 700 800 900 2008:
Abu Dhabi Investment Authority - UAE 875 US$1,782–2,240 billion
SAMA Foreign Holdings - Saudi Arabia 431

Estimated Change in
Kuwait Investment Authority - Kuwait 264 Market Size from 2007:
Libyan Arab Foreign Investment Company – Libya 100 -10%
Investment Corporation of Dubai - UAE 82

In 2008, it is estimated
Libyan Investment Authority - Libya 65 that SWFs lost
approximately 25% of
Qatar Investment Authority - Qatar
their value due to the
60
downturn in equity
markets and others asset
Fonds de Regulation des Recettes de I'Algerie 47
classes. However, their
reserves have been
Brunei Investment Agency - Brunei 35
replenished by current oil
and other revenues
Kazakhstan National Fund - Kazakhstan 26
Estimated losses could
exceed over US$700b
Other GCC 81
Other Non-GCC 39
GCC Non-GCC Variation
Source: SWF Institute, Deutsche Bank, Business Week
SWF: Investor segment badly affected by the global economic downturn
Asset Allocation
5%
The SWF segment is not predisposed to investing in Shari’a compliant 10%
Shari’a investments but prefers ethical investments
20%
Sensitivity Conventional financial institutions are not excluded from their
investment strategies 20%
20%
Will invest through well established and reputable international brands,
25%
with whom long-term relationships have been established
Product
Focus Have single management limits which forces multiple relationships
Conduct big-ticket investments
SWFs have been badly affected by the global economic downturn 55% 45%
Asset Equity investments in financial institutions have severely eroded as
Class have some real estate investments
Allocation Long and often passive investment positions should not substantially
affect asset allocation; however changes in sector and geographic
preferences may become apparent in the short-term.
2008 2009
Sophisticated structured product offerings and exposure to
international markets
Asset
Products that can compete, in terms of price, returns, scale and service Cash/Money Market Real Estate
Class Gap
quality, with best-of-breed conventional offerings Alternatives
45
Pension Funds: Fast growing institutional segment requiring long-term asset managers
Market Size

2007:
US$141 billion
Public Pension Reserve Funds Assets (in US$ billion) - 2007
Change in Market Size

from 2006:
92.8 -10%
15.9
9.3 8.6
6.6
2.5 2.4
1.2 1.7
Bahrain* Saudi UAE Kuwait Qatar Oman Pakistan Malaysia Indonesia Note: * 2008 data, ** 2006 data
Arabia** Size was estimated for certain GCC
countries by taking average assets per
employee as a proxy for fund size
Change in market size was estimated
Source: OECD, Ernst & Young analysis for GCC only
Pension Funds: Fast growing institutional segment requiring long-term asset managers
Asset Allocation
<5%
<5% 15%
Have no Islamic requirements but this does not preclude involvement
Shari’a in Islamic investments
Sensitivity As awareness of Shari’a compliance grows, these funds will be <5%
increasingly pressured into allocating more to Islamic offerings
50% 30%
International investments in listed instruments, conducted through
Product international portfolio managers with a focus on mature markets
Focus
Local conventional and Islamic banks engaged for cash deposits
15%
10%
Asset allocation has changed as increased investments have been
Asset made in equities due to attractive valuations
Class There has been a decrease in allocation to cash/deposits with short
Allocation maturities, but this still remains a dominant asset class 35% 40%
Fixed income is dominated by local government bonds but includes
limited exposure to international issues
2008 2009
Alternatives to cash/money market that provide attractive returns but
Product/
are low risk and allow for short tenures Equity Fixed Income
Asset
Class Gap Islamic mutual funds that can provide stable returns through exposure Cash/Money Market Real Estate
to international equities in mature markets
Alternatives
47
The global economic downturn has reduced the risk appetite of key investors,
particularly the individual investor segment and Takaful operators
Typical Investment Returns Objective for Key

Investor Segments
Return
Capital
Appreciation
Current Income Total Capital Appreciation
Returns Individual
Moderate risk Investors Significant risk
Returns achieved Returns achieved
through income through capital gains
Current Takaful
generation Requires a long-term
Operators
Income investment horizon
Takaful Other
Individual Operators
Capital Preservation Investors
Institutional Total Returns
Investors
Little or no risk Moderate level of risk
Nominal returns that Capital Quasi Returns obtained through
are at least equal to Preservation Institutional capital gains and
inflation Investors reinvested dividends
Short investment Requires a long-term
horizon investment horizon
Risk
Key:
Shift in investor Past Investor
preference
Present Investor
Islamic asset management has a potential revenue pool of over US$3.6 billion
Illustrative
Shari’a Sensitive Investable Assets in the GCC and Asia
by Investor Segment in 2008 (US$b) Potential Revenue Pool (2008)
Estimated CAGR
Investable Assets and Shari’a Sensitive Portion
(2004-2008) Shari’a Sensitive Assets
284 US$736b
Affluents ~10%
213
HNWIs and 184

~12%
UHNWIs 138
Awqaf and 100 Fee Assumption

~10%
Endowments 100
25-50 bps
Takaful 7.2
~10%
Operators 7.2
141
Pension ~18%
65
Funds Revenue Pool
1,782
SWF ~15%
213 US$1.84-3.68b
Total Shari’a
Sensitive 736
Assets
Source: Industry Interviews, Data Monitor, Ernst & Young analysis

Note: Total investable assets and Shari’a sensitive portion for investor segments are assumed using sources found in the investor segmentation and key markets sections of the report and supported by
industry interviews. Wealthy individuals and pension funds are for the GCC, Malaysia, Indonesia and Pakistan. Takaful operators are for the GCC and Malaysia, SWFs are for the MENA and Asia and
Awqaf is for the Middle East.
49
5. Competition and Business Models
Unfavorable market conditions, shifting investor preferences and a fragmented
competitive landscape could result in a shakeout of industry players
Average fund sizes remain small - increased

redemptions have resulted in fund liquidations
The competitive landscape for global Islamic fund
management 1. Macro 2. Asset appears
is fragmented - a shakeout
Economic Classes &
likely
Conditions Products
Fund managers need to decide whether to focus on
product development or distribution; returns or scale;
Islamic Asset
and in-house or outsourced
Key Management
Key Investor
Business
Segments
Risks
Competition
& Business
Models
51
Fund sizes remain small with over 50% having AuM of US$ 20m or less
Number of Funds by AuM
249
92
68
40
10 15 14
<20 20-50 50-100 100-200 200-300 300-500 >500

US$ million
Source: Zawya, Eurekahedge, Ernst & Young analysis Note: Data included 488 Islamic Funds
Two-thirds of all players manage less than US$100m in Islamic assets - the global
competitive landscape is fragmented and a shakeout appears likely
Total size of funds

launched (US$m) Global Islamic Fund Management Competitive Landscape
The National Commercial Bank
Samba
Total Funds: 19 ETFS Metal Securities Ltd
Total Funds: 9
Total Value: US$ 6.3 Billion Total Funds: 5
Total Value: US$ 2.3 Billion
Riyad Bank
Total Funds: 10
Total Value: US$ 1.38 Billion Public Mutual Berhad
Emirates Bank International PJSC
Total Funds: 14
Total Funds: 15
The Saudi British Bank Total Value: US$ 1.9 Billion
Al Rajhi Bank Total Value: US$ 1.7 Billion
Total Funds: 7
Total Funds: 13 Arabia Generale
Total Value: US$ 1.36 Billion Total Funds: 1
Total Value: US$ 800 Million
United Development Company
Total Funds: 1
Saturna Capital Corp
Total Funds: 2
Color indicates type of
Pacific Star Investment and
Abraaj Capital Development Pte Ltd Total Value: US$ 600 Million Total Value: US$ 1.36 Billion Institution:
Total Funds: 1
Total Funds: 1
Oasis Crescent Management Company Limited

Islamic
Bank Albilad Banque Saudi Fransi
600 Total Funds: 5 Total Funds: 9 Global Securities House
Total Funds: 7
Total Funds: 2
Total Value: US$ 607 Million Total Value: US$ 1.69 Billion Total Value: US$ 647 Million
Conventional
550 Arab National Bank
Total Funds: 5 Al Tawfeek Company For Investment Funds
Oasis Global Management Company (Ireland) Limited
Total Value: US$ 512 Million Total Funds: 11
Total Funds: 2
ADAM
Total Value: US$ 647 Million Bubble Size indicates
500
Kuwait Finance House
National Investments
Company
CIMB-Principal Asset
Global Investment House
number of funds
Management Berhad
450
Total Funds: 3
Total Funds: 4
Total Funds: 10
launched:
400 CIMB Wealth

Saudi Hollandi Bank 1 5 10
Advisors Berhad
Boubyan Bank Total Funds: 7
Total Funds: 2 Total Value: US$ 387 Million
350 Total Value: US$ 405 Million
Islamic Development Bank
Millennium Private Equity Total Funds: 1
300 Allianz Global Investors Luxembourg S.A.
The Saudi Investment Bank Tricon Trade Management Limited Total Funds: 6
Jadwa Investment Total Value: US$ 276 Million
Total Funds: 1
250 Shuaa Partners Siraj Capital
ING Funds Berhad
Abu Dhabi Islamic Bank (ADIB) HSBC Amanah

Dubai Islamic Bank PJSC
200 ABC Islamic Bank (E.C.) Navis Capital Partners Limited Total Funds: 6
Wafra International Investment Company Al Meezan Investment
Gulf Finance House
Management Limited
MAAKL Mutual Bhd CMH Fund UBS Islamic Fund Management
150 Pacific Mutual Fund Bhd
Management Group
Injazat Capital
Avigo Capital BNP Paribas Company SA
Unicorn Investment Bank BSC First International Total Funds: 1
MIMB Investment Partners Asset Management
Hwang-DBS Investment Property Investments Ltd Total Value: US$ 78 Million
Bank Berhad Bank Aljazira Kuwait Financial Centre Management Berhad
100 First Investment Alliance Investment
Venture Capital Kuwait Finance &
Company K.S.C. International Investment Company Management
Bank Futuregrowth Specialist
Investment Bank AttijariWafa Bank Citi Islamic Portfolios SA Asset Management
50 Solidarity HC Securities & Investment
UBL Fund
Managers Ltd
0
Notes: Size of circle denotes number of funds (equity, balanced, fixed income, cash, commodity, real estate and others) issued as of Q1 2009.
X-axis splits between players indigenous to key Islamic markets (i.e. the GCC, Pakistan, Malaysia and Indonesia) and foreign institutions.
Y-axis denotes total value of active managed funds (where data was available). A selected number of institutions have been box labeled with additional information.
.Source: Zawya, Eurekahedge, Annual reports
53
Adaptation will require a realignment of business models
Investment Management - Key Business Model Considerations
o n
uti
Increase product base to Focus on value added
St
retain market share?
rib
services and generate alpha?
rat
Keep distribution in-house?
ist
Revise fee structure to
eg
dD
Or move towards a wider encourage investor
ya
distribution strategy? Islamic participation?
an
nd
Investment
Takaful
ts
Fe
Fund
Industry
uc
es
od
Industry
Pr
Support Functions
Consider cost reduction by moving
back and middle office functions to
shared service centers or off-shore?
Firms will need to select a product and distribution platform that is aligned with its
strategy…
Investment Management - Products and Distribution
Proprietary Partnering Hybrid White Labeling Open Architecture
Key Features Key Features Key Features Key Features Key Features
Structuring, A partnership In-house production Asset manager Outsource strategy
marketing, strategy whereby the capability that is provides third party where the asset
investment and asset manager and a paired with the ability structured and manager becomes
management of funds strategic partner to outsource and managed funds purely a distributor of
are all conducted in- structure, invest, distribute best-of- under its own brand products that are
house manage, brand and breed products on name structured and
Capital intensive, distribute the fund in demand Less capital and managed by third
requires established collaboration human resource party managers
infrastructure and is Suitable for players intensive Requires minimal
human resource with either structuring Requires access to capital, human
intensive or fund management established family of resources and
expertise funds infrastructure
Does not require
branding
Core Competencies
Product Development Distribution
Typical Player
Niche Fund Supermarkets
55
… and position themselves as alpha-seekers or asset gatherers to set their fee
structure
Investment Management - Returns Strategy and Fees
Value
Alpha
Active management Seekers Passive management
strategy which seeks to strategy which seeks
create value and to track indices and
achieve alpha No-Man’s Land achieve beta
In order to maintain In order to achieve
performance, AuM and profitability, large AuM
scale are kept relatively and scale are sought
small Fees are lower and
Asset
Fees are higher and weighted towards
Gatherers
weighted towards management
performance
Scale
The average The average

management fee for an Asset managers must focus their strategy and management fee for a
active Islamic equity subsequently tailor their value, scale and price passive Islamic equity
fund is 1.4% objectives fund is 0.65%
Those that do not will be unable to distinguish
themselves in a volatile market
Source: Ernst & Young analysis, Eurekahedge * Note: average management fees are for the 10 largest Islamic equity funds globally.
Whilst considering a lean and efficient corporate structure through the outsourcing
of non-core business activities
Investment Management - Support Functions
Front Office Activities Middle Office Activities Back Office Activities
Trading Post Trade MIS Reporting

Client Relationship Settlement Financial Reporting
Product Structuring Price Verifications Reconciliations
Sales Risk Management Client Reporting
Financial Control
Non-core middle and back office functions can

be outsourced to achieve cost savings and
efficiency gains
Shared Service Centre (SSC)

Phase 2
Phase 3
Phase 1
Shared Service Centre (SSC) Offshore to low cost

outsource non-core activities to
Move non-core activities jurisdiction to achieve
near offshore or onshore
to SSC in home country substantial cost savings
location
57
6. Key Business Risks
Key business risks for 2009 reflect an industry in flux and a market that remains
volatile
The business risks landscape for Islamic asset

management has changed substantially since 2008
The economic downturn, a reduction
1. Macro in investor risk
2. Asset
Economic
appetite and Classes
unclear valuations will & most
be the
Conditionsrisks in 2009 Products
pressing business
Islamic Asset
Key Management
Key Investor
Business
Segments
Risks
Competition
& Business
Models
59
The 2009 Islamic investment fund industry business risks landscape has changed
substantially
How the Business Risks match up - 2009 and 2008 results
Prolonged
Prolonged
Global
Global economic
economic Risk
Risk management
management Reputation
Reputation of
of Business
Business model
model
Category
and
reduction
reduction in
in risk Valuations
Category
Risk and
downturn risk Valuations enforcement industry redundancy

downturn appetite enforcement industry redundancy
appetite
Risk
Financial
Financial Risk
Risk Strategic
Strategic Risk
Risk Financial
Financial Risk
Risk Strategic
Strategic Risk
Risk Strategic
Strategic Risk
Risk Operational
Operational Risk
Risk
2009
2009 11stst 22nd
nd 33rdrd 44thth 55thth 66thth
2008
2008 66thth N/A
N/A N/A
N/A N/A
N/A 44thth N/A
N/A
Market
Market risk
risk and
and Flight
Flight to
to safe
safe Difficulties
Difficulties in
in Risk
Risk management
management Poor
Poor performance
performance Extreme
Extreme market
market
resulting
resulting negative
negative assets
assets and
and valuations
valuations of
of practice
practice has
has led
led to
to aa conditions
conditions
Factors
Contributing Factors
effect
effect on
on changes
changes inin complex
complex ‘hard
‘hard to
to redundancy
redundancy andand decline
decline inin trust
trust in
in resulting
resulting in
in
investment
investment traditional
traditional asset
asset price’
price’ securities
securities re-evaluation
re-evaluation financial
financial services
services operating
operating model
model
portfolios
portfolios allocations
allocations Markdown
Markdown of of Risk
Risk models
models giving
giving Defaults
Defaults andand redundancies
redundancies
Increased
Increased Redundant
Redundant assets
assets due
due to
to aa false
false sense
sense of
of ratings
ratings Liquidity
Liquidity problems
problems
Contributing
redemptions
redemptions andand product
product portfolios
portfolios global
global downturn
downturn security
security and
and failing
failing downgrades
downgrades are are leading
leading toto
capital
capital outflows
outflows and
and investment
investment to
to capture
capture extreme
extreme further
further impacting
impacting business
business model
model
Lower
Lower take
take up
up of
of strategies
strategies events
events sentiment
sentiment failures
failures
new
new launches
launches Shift
Shift towards
towards
performance-
performance-
related
related fees
fees
Source: Corporate interviews, Ernst & Young analysis
The impact of the economic downturn coupled with the reduction in risk appetite will
be the most pressing business risks faced by the Islamic fund industry over the next
12 months
Key Business Risks Key Business Risks

2008* Islamic Investment Funds 2009
Global economic
1 Human resources 1
downturn
Limited Financial Compliance Prolonged

2 diversification reduction in
2
opportunities* investors' risk
appetite
3 Distribution
3 Valuations
4
Reputation of Valuations
industry* Risk
4 management
enforcement
5 Competition Economic
Downturn 5
Reputation of
industry
Global economic
6
downturn*
Risk Appetite Business model
6
redundancy
Key to Symbols Reputation Business Model

Up from Redundancy
2008
Risk Management
Down from
2008
New entry
Strategic Operational
Source: Corporate Interviews, Ernst & Young analysis * Note: To ease comparability, the names of the 2008 risks have been amended to reflect responses from this year.
61
The global economic downturn has been felt across all financial institutions. The
Islamic investment management industry has not been immune
Commentary and Contributing Factors

The global economic downturn is seriously impacting the Islamic investment management industry
“The downturn has created a
The crisis has battered the entire Islamic asset management spectrum, both those perceived to be the vicious circle. Investors
riskiest and the safest investment classes. wish to redeem units.
Funds have to sell to fund
Fund closures are expected to be significant the redemption, driving
prices down further. ”
Traditional asset classes such as real estate and equities have suffered heavily in the global crisis and Bahrain executive
some interviewees have predicted the closure of as many as 35-40 percent of funds in the sector.
Redemption requests are at a record level “We will see a number of

funds consolidating or
Managers have commented that they have witnessed a surge of redemption requests as a result of closing as their AuMs fall
revisions to the returns promised to investors. to inefficient levels.”
Saudi executive
Investment managers have to adapt to survive
Depressed market conditions are encouraging investment managers to implement cost controlling “We will not be launching
measures such as limiting compensation and looking at potential outsourcing strategies. any new funds this year nor
probably in the first quarter
of 2010.”
Bahrain executive
Key Considerations
Improve the core business function
To meet the challenges of a depressed market and declining demand in traditional asset classes, investment managers should seek to review
their operating model, streamline costs and focus on core competencies.
The prolonged reduction in risk appetite has resulted in a marked shift away from
traditional asset classes

Investors are changing their investment strategies
“Investors want to invest in
Interviewees have noted a change in strategy leading to changes in traditional asset allocations. something where they will
not lose money.”
Saudi executive
Capital protection is the primary aim for investors regardless of return
Interviewees have suggested that, in the current market climate, investors are investing in low risk
strategies even though these traditionally offer the lowest returns.
“Redemption requests are
increasing though most of
Yielding investments providing an income stream are preferred to bullet payments
our funds are closed and
Generally, interviewees commented that investors have moved to yielding investments which provide they cannot redeem.”
investors with an income stream rather than relying on a lump sum upon exit. Bahrain executive
Investment managers are diversifying their product range to target new investors “There is liquidity in the
market but investors are
Investment managers are having to diversify their product range to meet the changing needs of their taking a wait and see
investors and to target new investors for market share retention. approach.”
Bahrain executive
Key Considerations
Diversify income stream by developing new expertise
Faced with declining demand in traditional asset classes, investment managers need to enhance their product portfolio and seek to target new
investors.
63
Declining values of portfolios are causing reported net asset values (and hence
performance measurements) to decline

Declining and difficult to price valuations are causing fluctuations in prices and net asset value
“Valuations for PE assets are
Liquidity is still an issue, leading to difficulties in valuing portfolio holdings. proving difficult to achieve
in the current market,
Valuations (where measurable) are not being achieved affecting stated IRRs for
investors.”
Where valuations can be calculated, interviewees have agreed that these are difficult to achieve.
Bahrain executive
Investment managers are looking for new investment strategies “Redemption requests are
Distressed funds are being launched by investment managers wishing to take advantage of the current placing stress on
portfolios. As we sell at
market conditions.
distressed prices, we are
not achieving the
Declining values have left liquid/cash rich managers with a tremendous investing opportunity valuations we are ascribing
A number of interviewees have confirmed that with asset prices (equity as well as fixed assets) at to the assets.”
Dubai executive
historical lows, this is an exceptional time to purchase cheap assets.
“With valuations falling,
now is actually a good time
to buy cheap assets.”
Saudi executive
Key Considerations
Due diligence on potential investments should be thoroughly performed
In order to ensure accurate valuations, investment managers will need to ensure that thorough due diligence is conducted.
Risk management will play a pivotal role in 2009 and must be integrated across the
firm in order to assess risk at an enterprise level

Risk management is being integrated across the firm
“It takes a lot longer to get
Risk management is likely to be integrated across divisions and portfolios to create a comprehensive deals done now.”
firm-level profile. Bahrain executive
Expansion of risk models from back-testing approach to stress testing “We now have a risk
management member
Internal risk models will be expanded from back-testing to comprehensive stress testing, with higher sitting on the desk with the
probabilities assigned to extreme events. traders. This way, we can
assess the key metrics at
Systemic risks are to be viewed in light of the current collapse in the financial system the time of execution rather
than at a later date.”
Firms’ exposures will be identified in the context of the global financial system, with risks to the firm Bahrain executive
identified on a systemic level.
Counterparty risk management is prominent following high profile collapses “With markets as shaky as
they are, investors
Interviewees have noted a number of high profile international casualties in the Islamic fund
committed to deals are
environment.
trying to back out, leading
to litigation.”
Bahrain executive
Key Considerations
The trend in risk management is for better risk capabilities
Managers that thrive in this market are those who demonstrate a holistic approach to managing and mitigating risk.
65
The reputation of the funds industry has taken taking a beating recently, causing
investors to withdraw capital

The revision of expected returns has created an air of mistrust
Shocks to investors have led to a lack of trust as products that have been marketed as “safe” have
“There is an overall climate
proved to be riskier than expected.
of fear in the market.”
Saudi executive
Potential investors are looking at the bottom line before deciding to invest
“There is a move away from
With global markets tumbling and overall fund performance waning, investors are subjecting asset reliance on the name and
managers to closer scrutiny. history of a bank. Instead,
there is a move towards
Frequency of valuations has been increased in order to satisfy the need for up-to-date information looking at the financial
results.”
Weekly performance updates are now provided to clients to ensure they have constant access to Dubai executive
reliable and relevant data.
“Investors have a lack of
Investment managers are having to defend themselves trust in the market. Even
though they traditionally
Other interviewees are informing their investors of limits and levels of exposure to toxic asset classes. placed their trust in
managers, this is no longer
true.”
Dubai executive
Key Considerations
With the industry in the spotlight, investment managers need to be proactive
Investment managers need to be proactively engaged in actively communicating with their clients to address any concerns before they arise.
Source: Corporate interviews
Global financial turbulence has left many investment managers with redundant
business models

Previously robust business models have failed to cope with extreme market events
“We are proactively looking
Interviewees have suggested that, across the Islamic investment management spectrum, the business for ways to attract new
models used have nearly all proved to be redundant in the current market conditions. investors. Changing the
way we charge our fees is
Fee structures are being revised to encourage investors back to the market the obvious starting point.”
Bahrain executive
One of the key features for revision will be fee structures as investors seek to scrutinize the
management fees charged by investment managers and suggest investment managers rely on “This is a time to reassess,
performance based fees instead. reexamine and
restructure.”
Exit plans are being agreed prior to investment to ensure liquidity Saudi executive
Interviewees have commented that strategic investors are being sought to partner the investment “It is becoming
manager at the outset of the fund launch. uneconomical to operate as
a one-stop shop. Managers
are increasingly turning
New strategic ideas are being assessed towards white labeling their
Islamic investment managers are seeking to work closely with conventional investment managers to products and focusing on
develop an approach treating Islamic tranches as an ‘asset class’. what they do best.”
Dubai executive
Key Considerations
Short-term focus should not overshadow long-term opportunities
It is important that any restructuring decisions are made with the long term strategic objectives in mind and not simply as a result of short-term
results.
Source: Corporate interviews
67
7. Conclusions
Islamic asset management has been impacted by the global recession - in order to
survive the current downturn, participants will need to adapt
The
The global
global recession
recession has
has Asset
Asset classes,
classes,
led
led toto market
market corrections
corrections particularly
particularlyequities
equities and
and
and
and global
global asset
asset real
real estate,
estate, have
have been
been
management
management has has shrunk
shrunk adversely
adverselyaffected
affected byby
for
for the
the first
first time
time since
since the
the global
global recession
recession
2002
2002 Asset
Asset classes
classes that
that offer
offer
GCC
GCC and and Asia
Asia have
have not
not
Macro Asset liquidity
liquidityand
and low
low
been
been insulated
insulated fromfrom the volatility
volatility have
have gained
gained in
downturn
the economic Classes & popularity
in
downturn popularity
Reduced
Reduced oil oil revenues
revenues Conditions Products
and
and aa drop
dropin in global
global trade
trade
flows
flows have
have decreased
decreased
economic
economic output output inin the
the
GCC
GCC and and Asia
Asia
respectively
respectively
Islamic Asset
Key Management
Key Investor
Business
Segments
Risks
The
The business
business risks
risks Investors
Investors have
haveseen
seen
landscape
landscape forforIslamic
Islamic their
theirinvestable
investable wealth
wealth
asset
assetmanagement
management has has decline
decline asas aaresult
resultof of
changed
changedsubstantially
substantially Competition the
the global
global downturn
downturn
since
since 2008
2008 & Business Asset
Asset allocation
allocation has
has
The economic
The economic downturn,
downturn, changed
changed to toreflect
reflect new
new
aa reduction
reduction in
in investors’
investors’ Models market
market realities
realities --there
there
risk
risk appetite
appetite and
and unclear
unclear has
has been
been aa flight
flight to
to
valuations
valuations will
will be
be the
the safety
safety
most
most pressing
pressing business
business
risks
risks in
in 2009
2009
Average
Average fund
fund sizes
sizes remain
remainsmall
small --increased
increasedredemptions
redemptions have
haveresulted
resultedin
in fund
fund
liquidations
liquidations
The
The competitive
competitivelandscape
landscape for
for global
global Islamic
Islamic asset
asset management
managementisis fragmented
fragmented -- aa
shakeout
shakeout appears
appears likely
likely
Fund
Fund managers
managers need
need to
to decide
decide whether
whetherto
to focus
focus on
on product
product development
development or
or
distribution;
distribution; returns
returns or
or scale;
scale; and
andin-house
in-house or
or outsourced
outsourced
69
Appendix 1 – Domicile Considerations
Key considerations, including repatriation and taxation, must be considered in order
to determine an appropriate domicile for an Islamic investment fund
Key Considerations for Fund Domicile and Relative Importance
Is the repatriation of funds allowed?

Does the jurisdiction have a developed Are there withholding
banking system? taxes?
What markets will the fund
invest in? Are fund custodians present? Does the jurisdiction
have double tax
Do certain jurisdictions
treaties?
provide favorable points of
access? Are there other tax
Repatriation of considerations (e.g.
Funds Zakat)?
(Primary)
Geographical
Taxation
Mandate
(Primary)
(Secondary)
Key
Considerations
Target Fund Manager
Investors Location
(Secondary) (Tertiary)
Who will the fund be Target Asset
placed with? Class Where is the fund
Are there regulatory (Secondary) manager based?
restrictions to consider
Which regulator
(e.g. difference between
licensed the manager?
accredited, institutional,
public?) Which instruments will the fund invest in?
Are there indigenous service providers
experienced in the asset class?
71
Meanwhile, the majority of Islamic funds are domiciled in 6 key jurisdictions
Key Islamic Fund Domiciles by Number of Funds (Q1 2009)
South Africa
Singapore 3%
2%
Malaysia, 23% Qatar 1%

Switzerland 2%
Thailand 1%
Pakistan 2%
Turkey >1%
Saudi Arabia, Netherlands >1% United Arab Emirates
19% Others, 25% Morocco 1% 1%
Liechtenstein >1% United Kingdom

Labuan >1% 1%
Hong Kong >1%
United States 2%
Kuwait, 9% Germany 2%
France 1% Australia >1%
Egypt 2% British Virgin Islands 1%

Canada Brunei 1%
Channel Islands
Indonesia, 3%
2% 1%
Luxembourg, 7% Ireland, 4%
Bahrain, 6% Cayman Islands, 4%
Six jurisdictions are home to almost two-thirds of all global Islamic funds
Two main types of domicile exist - domestic and offshore destinations
Funds based in domestic domiciles are established to gain access to local investors and local assets
Funds based in offshore target international assets and are established to take advantage of low taxes, fund administration, regulatory
regimes and investor perception
Source: Zawya, Eurekahedge, Ernst & Young analysis
Favoured jurisdictions are characterized by low or no taxes, existence of double tax
agreements and widespread international acceptance
Key Islamic Fund Domiciles

Malaysia Saudi Arabia Kuwait Luxembourg Bahrain Cayman Islands
Withholding Tax
Dividends 0% 5% 15% 15% 2 0% 0%
Interest 1 5% 0% 0% 0% 0%
15%
Royalties 10% 15% 0% 0% 0% 0%
Participation Exemption
Dividends Yes 3 No No Yes No Yes
Capital Gains Yes 4 No No Yes No Yes
Controlled Foreign Company (CFC)
Specific Rules No No No No No No
Tax Treatment of Hybrid Instruments
Status No 5 Not Applicable No 6 Yes 7 Not Applicable No
Double Tax Treaties (Number of countries)
In existence 63 8 41 50 12 0
Pending 20 12 0 22 3 0
Relative Strength of Regulatory Regime
Grade Good Average Average Good Good Good
1 - Any company not resident in Malaysia is exempted from Malaysian tax (including withholding tax) on interest income from Islamic securities (other than convertible loan stock) issued in Malaysian Ringgit (RM).
2 - Since January 1st, 2009, a 0% WHT rate applies if the dividend distribution is made to a company residing in any State which has signed a double tax treaty with Luxembourg and to Luxembourg permanent establishments of such entities
and provided the following requirements are met: (i) the receiving is subject to an effective tax rate of at least 10,5% and (ii) its tax basis is determined following similar rules to those provided by Luxembourg tax law, and (i) it either holds at
least 10% of the shares of the Luxembourg entity or (ii) the acquisition cost of the shares amounts to at least € 1,200,000.
3 - Malaysia adopts a territorial system of taxation such that foreign-sourced income, including dividends from non-resident companies, is not subject to Malaysian tax.
4 - There is no capital gains tax regime in Malaysia at this time and therefore capital gains are not subject to tax.
5 - No specific law for tax treatment of hybrids.
6 - Treatment not provided for in tax law. No practical experience.
7 - No specific law for tax treatment of hybrids.
Source: Relevant country regulations, Ernst & Young analysis Note: This information is not exhaustive, should not be construed as tax advice and provides only a summary of key factors.
73
Top 5 domiciles for each Islamic asset class/product offering
Key Islamic Fund Domiciles
Rank Equities Money Market Fixed Income Balanced Real Estate Commodities Others
1 Malaysia Malaysia Malaysia Malaysia Cayman Islands Malaysia Kuwait

2 Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Kuwait Jersey Cayman Islands
3 Kuwait Kuwait Pakistan Indonesia Channel Islands Saudi Arabia Saudi Arabia
4 Luxembourg Cayman Islands Indonesia Pakistan Bahrain Ireland Malaysia
5 Bahrain Pakistan Channel Islands Kuwait Saudi Arabia Bahrain UAE
Domestic Domicile International Domicile
Malaysia and Saudi Arabia, due to the sheer size of their economies and Islamic finance sectors, emerge as the top destinations for most fund
categories
Real estate and other funds (which include alternative funds) are more commonly based in international domicile locations due to ease of
establishment, tax considerations and developed regulatory regimes
Source: Eurekahedge, Ernst & Young analysis
Appendix 2 - Team and References
Ernst & Young’s Islamic Financial Services Group
EMEIA* Sameer Abdi +973 1751 2801 sameer.abdi@bh.ey.com
Bahrain Salmaan Jaffery +973 1751 2802 salmaan.jaffery@bh.ey.com
Saudi Arabia Ahmed Taher +966 1215 9438 ahmed.taher@sa.ey.com
Qatar Robert Abboud +974 4573 444 robert.abboud@qa.ey.com
Kuwait Daryoush Pour +965 2295 5055 daryoush.pour@kw.ey.com
UAE Najeeb Rana +971 4312 9343 najeeb.rana@ae.ey.com
United Kingdom Richard H. Grainger +44 207 951 1091 rgrainger@uk.ey.com
Luxembourg Pierre Weimerskirch +352 42 124 8312 pierre.weimerskirch@lu.ey.com
Malaysia Abdul Rauf Rashid +603 7495 8000 abdul-rauf.rashid@my.ey.com
Hong Kong James A. Smith +852 2846 9888 james.smith@hk.ey.com
* Note: Europe, Middle East, India and Africa
The report’s methodology and our interviews
Survey Methodology Business Risks Radar

Our survey sought to identify key trends and business risks for the The Ernst & Young risk radar is a simple device that allows us to
global Islamic asset management industry through in-depth present the top 6 business risks in the Islamic asset management
interviews with executives and industry observers. industry.
These discussions were used to gauge business sentiment and The risks at the center of the radar are those that the individuals
identify key areas for inquiry. we interviewed thought would pose the greatest challenge to the
Interviews were conducted in March and April of 2009. A total of industry in 2009.
24 interviews were conducted in five different countries by Ernst &
Young staff. Business Risk Categories
Interviews centered on four main topics of discussion, namely: The radar is divided into four sections that correspond to the Ernst
Business confidence & Young Risk Universe™ model.
Investor appetite Compliance threats originate in politics, law, regulation or
Competition corporate governance;
Business risks Financial threats stem from volatility in markets and the real
economy;
Business Risk Ratings Strategic threats are related to customers, competitors and
Ernst & Young subject matter experts developed a list of Islamic investors; and
asset management business risks and contributing factors. Operational threats impact the processes, systems, people and
All interviewees were provided with this list of business risks and overall value chain of a business.
requested to rate each to reflect its severity to their respective
business over the coming 12 months. Interviewees were also Acknowledgement, Anonymity and Quotes
asked to add any additional risks they felt were important.
We would like to thank all those interviewees that agreed to
The results of this rating process were tallied and a relative contribute to our report.
ranking assigned to each. This rank formed the basis for our
All interviewees were assured of anonymity and minutes
comparative study with 2008 results.
documented during our discussions were approved by respective
interviewees.
Quotations have been used to support argument made in the
report.
77
References and the Project Team
Sources Ernst & Young’s Project Team

Bank Negara Malaysia Annual Takaful Statistics (2007)
Bloomberg Bahrain Office
Business Week Sameer Abdi Salmaan Jaffery
Capgemini and Merrill Lynch World Wealth Report Zahir Rashid Mark Stanley
CIA World Fact book Kamran Akhtar Saad Qureshi
Company Annual Reports Samir Bhegani Fahim Shelot
Datamonitor Global Wealth Model Faisal Hasan Hala Naseeb
Deutsche Bank - SWFs and Investment Policies
Eurekahedge For questions or comments, please contact Mark Stanley on:
Financial Times +973 1751 2811
Global Business Monitor International mark.stanley@bh.ey.com
Global Insight
IFIS
Malaysian Central Bank
Merrill Lynch
Ministries of Justice and Islamic Affairs, Foundation and Awqaf
MSCI
National Mutual Fund Association
OECD-Private Pensions Outlook 2008
Preqin
Qwest Investment Management
Standard & Poors
SWF Institute
Zawya
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Islamic finance has enabled us to create significant value for the leading players in the Islamic banking, finance and investment markets. The portfolio of MEGA brands
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Partnering with Governments and the Industry Thought Leaders
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MEGA continues to grow its portfolio of Islamic finance brands to further extend our leadership position across the Banking, Takaful, Funds, Capital Markets, and
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Surviving and adapting in a downturn

Dear Investments Industry Leader,

Shaping the Future of the Islamic Finance Industry Since 1993

Dear Investment Executive

October January 2009

Global Islamic Funds Industry

Assets under management (AuM) Number of Islamic funds

Source: Eurekahedge, Zawya, Ernst & Young analysis

Global Islamic Funds - Annual Launches and Liquidations

Number of Islamic funds launched Number of Islamic funds liquidated

Source: Zawya, Eurekahedge, Ernst & Young analysis

Global Asset Management Industry

2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008

US$ billion US$ per barrel

2003 2004 2005 2006 2007 2008 2009e 2010e 2011e

Nominal GDP (US$b) Global Average Crude Oil Price (US$)

US$ billion US$ per barrel

2003 2004 2005 2006 2007 2008 2009e 2010e 2011e

US$ billion US$ per barrel

2003 2004 2005 2006 2007 2008 2009e 2010e 2011e

M1 Money Supply (US$b) Global Average Crude Oil Price (US$)

Nominal GDP (US$b) Merchandise Imports (US$b) Merchandise Exports (US$b)

Source: Global Insight, Datamonitor, Ernst & Young analysis

Total M1 Liquidity in Malaysia and Indonesia

M1 Money Supply (US$b)

Source: Global Insight, Ernst & Young analysis

Islamic Asset Distribution (Funds Size US$ million)

Cash 1,971 2,658 409

Commodities 462 3,437

Balanced 291 266 423

Other 1,463 262 288 568

Middle East Global Asia North Emerging Europe

Islamic Indices Islamic Equity Funds - Average Returns

Global Sukuk Issuance Islamic Fixed Income Funds - Average Returns

30,000 27,167 27,512 5%

400 5% 2.2% 1.8%

2006 2007 2008 Q1 2009

3 Month LIBOR Islamic Cash Funds - Average Returns

Global REIT Index Islamic Real Estate Funds - Average Returns

Target Market of Annually Launched Global Islamic Funds (Number of Funds)

40% 32% Global

2004 2006 2008 2009e

How asset classes performed - 2009 and 2008 results

Source: Ernst & Young analysis

Investors have seen their investable wealth decline as

Global Islamic Funds by Asset Manager (Q1 2009)

Global Estimated Muslim Populations in 2008

Estimated Algeria Morocco

Individual Quasi Institutional Institutional

Mass Affluent Awqaf and Endowments Takaful

HNWI Sovereign Wealth Funds

Individuals with financial assets in en rn ab gh mpu

Estimated Market Size

Note: Asia includes Malaysia, Pakistan and Indonesia

Mass Affluent: A significant flight to safety has occurred

Between 70% and 90% of investors prefer Islamic products 15%

Small ticket appetite means investment is made almost exclusively

The mass affluent segment has seen a significant flight to safety

Source: Industry interviews, Ernst & Young analysis

In 2008, the total wealth

Asian HNWI and UHNWI

2005 2006 2007 2008e 2013f

Middle East Asia-Pacific

Estimated Market Size