That fund structure was a first not just for VG, but also for Jersey, being the first Shariah-compliant fund structured using Jersey entities. Our work led to the creation of several similar real estate funds, as well as a number of Special Purpose Vehicles (SPVs) for individuals or small groups wishing to invest in the sector. This trend continues to this day with the establishment of structures to own UK commercial real estate on behalf of a number of Islamic Financial Institutions from across the GCC, as well as those established in the UK. Over this period there have been many changes to tax legislation in the UK, the availability of finance to support such transactions and the requirements of banks providing that finance. VG has actively engaged with lawyers, Scholars and other advisers to find solutions to the issues arising from these changes and it is somewhat gratifying to see these solutions adopted by our competitors as ‘industry best practice’.

A very early example arose following a meeting with one of the leading Scholars, Sheikh Nizam Yaquby, in 2000. We were discussing the capital structure of an equities fund we were working on which had been drafted with Ordinary Shares and Preference Shares. We had a wide ranging discussion on various concepts in Company Law and the application of Shariah principles within the context of that Law and in particular the fundamental principle of Islamic Law that ‘no man may have preference over another’. Following this we agreed to reclassify the Ordinary Shares as Management shares, in accordance with the role of a Mudarib in a Mudarabah contract, and the Preference Shares as Participating Shares to reflect the position of the underlying investors. This was the first Jersey company ever established with these categories of shares, something that has since become almost standard in Shariah-compliant corporate structures in Jersey and elsewhere.

Another first was the award winning “Caravan Sukuk” structure in 2004. Sukuk structures were a natural extension of our work in Islamic finance, also drawing on our expertise in structuring and administering conventional securitization projects. Asset-backed securities represent an ideal class of securities for Islamic investors, so long as the underlying assets are themselves acceptable and the cash-flows coming from them are generated and used in a Shariah-compliant manner. As well as being the first Sukuk issued by a Jersey company, Caravan is now widely regarded as the first such structure with a ‘true sale’ in which the securitised assets were physically located in the GCC. Sukuk structures somewhat fell out of favour following the financial crisis of 2008, (unless these were for quasi-government institutions) but there is evidence of renewed interest as conventional banks face increasing controls over liquidity positions and lending criteria.

Since 1996 our involvement in the region has expanded to cover the full range of services including “traditional” trusts and corporate structures for individuals and families. These structures can play an important role alongside Islamic equivalents in succession planning for regional families.

Our team travels to the region on a regular basis and we hold regular training sessions for our staff including client administrators, accounts staff and even our compliance team to ensure that they all understand the differences in the work we do for our clients from the region and, most importantly, the cultural perspective.

In September 2016, VG was named as winner of the award for Best Islamic Trust Formation Services at the Global Islamic Finance Awards, an award that we have retained in 2017. However we are not resting on our laurels. In the coming months we have plans for several trips to various destinations across the GCC to meet with clients and contacts, and anticipate following up on a trip to Malaysia by visiting other countries in that region.

To gain a true knowledge and understanding of the core principles of Islamic Finance, and their application to commercial transactions and private financial structures, is not something that can be learnt from a textbook. It can take many years of practical experience and the type of commitment that we have demonstrated over several decades.

Trevor Norman, Director