1/12/2017 Islam,WesternPensions,andRealAssets|AllAboutAlpha:HedgeFundTrends&AlternativeInvestmentAnalysis|Afinanceblogabouthedgefund

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Intellectual Property, Natural Resources and Land, Newly Added,
Operationally Intensive Real Assets, Real Assets
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18 Oct 2016

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NewlyAdded(227)

TheA.I.Industry(379) +
HedgeFunds(887) +
ArecentacademicdiscussionofthemuchvexedquestionofIslamicfinance
(includingthealwaysatleastimplicitquery,howdoesitfitintothebroaderusually
Commodities(131) +
nonIslamicglobalpicture?)focusesontheroleinIslamofrealassets,understood
astangibleobjectssuchasland,buildings,machinery,andcommodities.
PrivateInvestments(121) +

TheessaycomestousfromLarryBeefermanandAllanWain,bothof RealAssets(79)
HarvardLaw.
LiquidandFixedIncome
EnglishandArabic RealEstate(2)

Ofcourse,intheEnglishlanguagethewordsrealityandrealtyareclose NaturalResourcesand
relatives,insoundandinsense.Landhasseemedtomanyinthehistoryof Land(9)
Englishlawandeconomicthinkingtobeakeyassetpreciselybecauseitissoreal
enduringandfruitful. Agriculture(4) ARCHIVES
Archives
InIslamicfinance,withitsoriginsinArabictexts,thesameconnectionisboth Farmland(5)
SelectMonth
moreinsistentandmorecomplicated.Perhapslandisnotatthebaseof
everythingreal.Rather,attheheartoftheIslamicnotionofthereal,asthese OperationallyIntensive
authorsdescribeit,onefindstangibleobjectsthatcanbeheldinasellershands RealAssets(36)
andtransferredimmediatelytoabuyerinamarketplace.BeefermanandWain
writethatthelanguageandformulationoftheobservationsofseveralearly Infrastructure(25)
Islamicscholars,areespeciallyevocativeofphysicalexchangesinvolvingtangible RSS 4127 4851 Connect
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FollowersFans LinkedIn
objects,forexample,commoditiesandgoods.TheyquoteAbudllahAlwiHaji IntellectualProperty
Hassan,whowritesthatitwascommonpracticeamongpreIslamicArabic (10)
merchantstosellgoodswhichhadnotbeenwiththevendorandhadnotbeen
possessedbyhimandthatearlyIslamwasinrebellionagainstsuchasneaky RealEstateEquity +
practice. Investments(40)

Etymologically,themeaningoftheArabicwordgenerallytranslatedsale(bay)is
theexchangeofmalformal,orpropertyforproperty,ofyourbirdinthehandfor
StructuredProducts(51) +
mygoldcoins,alsoinhand.

http://www.allaboutalpha.com/blog/2016/10/18/islamwesternpensionsandrealassets/ 1/4
1/12/2017 Islam,WesternPensions,andRealAssets|AllAboutAlpha:HedgeFundTrends&AlternativeInvestmentAnalysis|Afinanceblogabouthedgefund
BeefermanandWainpursuetheetymologicalthreadfurther,citingMuhammad
WohidIslamontheoriginofmal.Inhisview,birdsinthesky,fishinthewater,
RiskManagement&Operations +
(189)
treesintheforest,andminesinthesecretdepthoftheearthareetymologically
distinctfromtherangeofthingsthatcanbemal.Yetofcourseinthedominant
westerntradition,theownershipoflandmaycarrywithittheownershipof
AllocatingtoA.I.(852)
whateverdiamondsorgoldmaybeinitssecretdepths,aswellastherighttocatch
fishinthewatersthatrunthroughit. Alpha&Beta(364) +

Further,itisntclearapriorijustwhatistheconnectionbetweenmalinthislimited Benchmarking& +
etymologicalsenseandintangiblessuchasintellectualproperty,thatis,copyrights PerformanceAttribution
ortrademarks.TheOrganizationofIslamicCooperationbroadlyendorsed (174)
intellectualpropertyin1988.Onewonderswhythatlandmarkissorecent,since
theKoran(andtherelevanthadiths)hadbeenaroundforalongtimebeforethat! AssetAllocationModels +
(48)
Debt
InstitutionalAsset
AnotherkeywordinunderstandingtheIslamicviewofreal(asdistinctfrom Management(321)
financial)assetsisthewordtranslatedintoEnglishasdebt,thatis,dayn.
BeefermanandWaincharacterizetheideaofadebt(asalegalobligationdirected Consultants(3)
atanindividualorentity)asaWesternview.TheIslamicview,ontheother
hand,isthatadebtisitselfasortofthing,albeitanabstractsort.AShariah InstitutionalInvesting
legitimatecredittranslationthusisasortofexchangeofthingforthing.The (299)
vendorofabasketoffishmayagreetotakeadebtinexchange,ratherthantaking
thetangiblegoldcoin.Thispossibility,though,ishedgedaboutwithmany Highnetworthinvestors
restrictions. (20)

AsametarulegoverningtheexistenceofShariahrules,onecansaythatthe Endowments&
furtherawayfromasimplethingforthingtradeatransactiongets,themorerules Foundations(18)
willapplyandthemorehoopsthetransactionspartieswillhavetojump.
FamilyOffices(7)
Allofthismaybefascinatingforthestudyofcomparativereligions,languages,
MiddleEasternhistory,andsoforth.ButBeefermanandWainareinterested Finance&Economics(430) +
becausetheyrewiththeLaborandWorklifeProgramatHarvard,andassuch
theyreinterestedinpensionfundmanagement.
OtherTopicsinA.I.(295) +
WhyCare?

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TheyworkwithinthepremisethatformostsuchfundsintheU.S.,thefactthata
A.I.'
particularinvestmentwouldbedeemedbysometobeinaccordwiththeIslamic
narrativeisamatterofindifference.Butopportunitiesandtransactionsfashioned
inaccordwiththeprinciplesofIslamicfinancemaywellhaveaninstrumental CashManagementStrategies
valueforpensionfundmanagers,andsodoesthechallengeoflearninghowto forPrivateEquity
thinkinthesamemannerthatthosewhodothefashioningthink.

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