KUALA LUMPUR (Sept 11): Chinese state-owned Asia Pacific Investment Bank (APIB) will be launching an Islamic Digital Finance Fund in Malaysia to invest in syariah-compliant financial technology (fintech) start-ups.

In a statement today, the bank said the fund will be launched in collaboration with OUD Asset Management, a boutique fund management company specialising in syariah-compliant equity investments with more than 40 years of experience.

APIB said it had signed a memorandum of understanding (MoU) with OUD Asset Management to establish the fund.

It said the Islamic Digital Finance Fund will allow investors to tap into the massive financial service market.

APIB director Datuk Foo Yong Hooi said the bank is committed to fintech.

Foo also believes that the impact of investing in digital finance goes beyond the financial industry.

“Many governments have been disbursing financial assistance to aid citizens and businesses in response to the Covid-19 pandemic.

“Digital financial services allow them to track the utilisation of funds and adopt a more targeted approach to revitalise their economies,” he said.

Foo added that investing in fintech start-ups could be perceived as too risky and a lack of substance.

“These investments come with high risk and some fintech start-ups have lofty ambitions without strong fundamentals. This is where the collaboration between APIB and OUD comes into play,” he said.

Foo said APIB and OUD share the same vision of bringing together decades of investment expertise to invest in fintech start-ups with good potential.

“We will ensure we invest according to syariah principles to promote ethical, accountable and reliable investments,” he said.

“Also, the potential of investing in digital finance is enormous for investors. The fund will provide more confidence to investors and opportunities to create a positive impact on society, the environment and economy along with a financial return,” he said.

Meanwhile, OUD managing director Junita Ishak said although fintech had already penetrated the Islamic finance space, it is still in its infancy stage.

“We believe this presents a great opportunity for investors to have exposure to Islamic digital finance players.

“OUD recently launched a Healthcare Fund in the midst of the Covid-19 pandemic, and looks forward to the coming fund in collaboration with APIB to support the digital economy transformation of the country,” she said.