WHY SHOULD WE INVEST IN INVESTMENT MANAGEMENT COMPANIES

Redirecting finance towards profit is the prime objective of any investment. Management of the finance includes professional management, project management, leasing management, management consultancy and corporate legal consultancy. The management team of Investment Management Company will manage the invested fund and yields future benefits for the investor. All the operations and management of the company will be based on the organizational principle.

Investment management companies in India which follow Islamic principles follow sharia rules. Islamic financing companies in India provide services to Sharia compliant venture capital funds in India

An experienced manager in Islamic investment Management Company in India will help to manage sharia compliant funds in India in different ways:

• ·         Recognize the best strategy for investment.
• ·         Analyze the status of finance and assist in stock selection
• ·         Monitor investment on an ongoing basis.
• ·         Help to gain maximum benefits from investment.
• ·         Provide advice on investment areas.
• ·         Handling the investor decisions and investment benefits with great care.

Investment management companies provide:

·         Help to the fund contributors to adjust superior risks and provide them ethical returns.

·         The portfolio companies with stable long term funds and are given expert guidance to their business.

·         Employees a stable and enriching work environment.

·         The expert and experienced promoters to mentor entrepreneurs and obtain reasonable and sustainable outcomes.

The main benefits of investment management are:

Security in your investments

Investment management companies help you to understand and control the risks in investment. More risk is always associated with more loss of money. Similarly if the risk taken is very less also it will make negative trend in profit. Your savings will be eroded as a result of inflation.

Avoid costly mistakes

Investments are always complicated and you will be always over concerned in the absence of an efficient investment management company. An efficient management team  uses  latest tried and tested advances in investment.

To have more to spend on good things

Basic goal of any investment is future prosperity. The investment Management companies helps to make most of these assets over time and thus you can enjoy their benefits.

To make your life more easy

Investment management companies helps to make your life easier by keeping things as simple as possible.

To understand your investment

Such companies help you to take proper decision on your funds’ investment. Efficient managers can give you proper guidance whenever you need.

To stay up to date

Investment management companies help you to stay up to date with your investment to avoid sudden shocks. Investment management provides you annual reports and review meetings as well as quarterly valuations.

Introduction of Islamic Finance

Financial system influence who can commence a business and who cannot, who can pay for education and who cannot,who can attempt to realize once economic aspiration and who cannot. Thus finance can shape the gap between the rich and the poor and the degree to which that gap persists across generations. A financial system that is based on Islamic principles and values,which eliminates ‘Riba’ and ensure a profit sharing mechanism in the financial system is known as islamic finance. It may be characterised by the absence of interest based financial institution and transaction, doubtful transaction or gharar, stock of companies dealing in unlawful activites, unethical or immoral transations such as market manipulation,insider trading short-selling etc. 

Islamic banking can be defined as a form of modern banking based on Islamic legal concepts using Risk sharing as its main method excluding financing based on fixed pre-determined return.

Islamic finance is a system of financial activities follows with “Sharia”s law, include the “QURAN” and the sayings and actions of the prophet “mohammed” recorded in a collection of books known as the “Sabib ba baditb” and a body of laws created by Islamic scholars knows as the “figb” the main difference between Islamic finance and other form of finance is particularly the structure of how the bank is set up. The conventional banking the purpose is to pool money from the investors and give loans to public

But what is Islamic structure then in essence how an Islamic bank is supposed to be set up how an Islamic bank is supposed to be set up is based on the theory of “sources and application of funds” there should be a single flow between the deposits and the financing or investment use pf funds: this means there is no distinct function. It is a single function where customers deposits or investment pool is used to fund financing portfolio. There are set of principles of Islamic finance in India there as follows

Principles of Islamic finance 

l  Wealth should be generated from legitimate trade and asset-based investment

l  Islamic sharia Investment India should have a social and an ethical benefits to wider society

l  Risk should be shared

l  All harmful activities should be avoided    

Prohibited elements in Islamic finance

l  Riba     (it refers to the “premium” that must be paid by the borrower to the lender along with the principal amount as a condition for the loan)

l  Gharar  (it means exposing oneself to excessive risk and danger in a business transaction a a result of uncertainty about the price )

l  Maysir   (Gambling) (it refers to easily available wealth or acquisition of wealth by chance)

ALTERNATIVE INVESTMENT FUNDS IN INDIA

Alternative investment funds (AIFs) in India can be any investment from Indian or foreign sources pooled in the form of a trust or company or Limited Liability Partnership (LLP). Investment funds other than the traditional investments modes like stocks, bonds, capital etc come under AIF. AIF does not come under the jurisdiction of any regulatory agency in India. Alternative investment funds include hedge funds, venture capital, financial derivatives and assets like paintings, coins, stamps etc. The gain in these assets can be called capital gains.

According to SEBI (securities and exchange board of India) AIFs can be operated under the three categories:

Category I: The investments that government consider economically and socially viable come under this category. This includes social ventures, infrastructure funds, real estate funds, start-ups etc. They get incentives from government.

Category II: This category will not get any incentives or help from government or any other regulator. They can invest anywhere without raising any dept. Private equity funds dept funds etc come under this category.

Category III: They get short term gains without any concessions or incentives from government and other regulatory body. Open ended funds like hedge funds, alternative investment funds etc are examples.

Both Indian and foreign investors can invest in the AIFs. For the purpose of AIFs the government will do away with categorization of foreign portfolio investors (FPI) and foreign direct investors (FDI). The AIF industry which is in its nascent form in India can be boosted by this decision.

Secura is an investment management company registered under SEBI which provides investment management services to venture capital funds in India, real estate investment trusts, mutual funds etc.  It is certified as India’s first Sharia Compliant fund or real estate VCF. Secura mobilize funds from retail investors and pool them in to pool of investment.

AIFs can include investment companies which receives investment from a lot of investors with a view to invest it with a defined investment policy for the benefit of investors. Do not require authorization for collective investments in transferable securities.

Most of the AIFs raise capital from high net worth investors. They do this with reference to certain policies for the benefit of the investors. The dilution of FDI and FPI will ensure ease of flow of investment. These funds offer great returns to both global and domestic investors and take India to a large investment definition.