Sharia, translated as “the way” or “the path,” is a comprehensive legal framework derived from the Quran and the Hadith, influencing various aspects of personal and public life for Muslims. With an emphasis on social justice, ethical investing, and sustainable development, Islamic finance encourages allocations in sectors like healthcare, renewable energy, and infrastructure. In 2024, the global Islamic finance market reached approximately $3.5 trillion.
Sharia-compliant finance offers attractive alternatives to investors interested in ethical investing, aligning the principles of Islamic finance with the objectives of private equity’s model of direct ownership and management. This alignment has significantly bolstered the growth of Sharia-compliant private equity funds, with global assets rising from about $20 billion in 2002 to over $200 billion in 2022.
To learn more about the interplay between Sharia-compliant finance and private equity, visit the full article on law.com.