The Kingdom's First Endowment Investment Fund Is Launched

Riyadh, Monday, 3 September 2018

H.E. Dr. Majid bin Ibrahim Al-Fayyadh, Executive General Supervisor of the King Faisal Specialist Hospital & Research Centre General Organization and Chairman of the Board of Wareef Charity Foundation, confirmed that the “Alinma Wareef Endowment Fund” is the Kingdom's first open, publicly offered endowment investment fund, with its units endowed in favour of the “Wareef Charity” Foundation, in partnership with Alinma Investment.

This came during a press conference held on Monday at King Faisal Specialist Hospital in Riyadh. Al-Fayyadh said: “Units will be offered to subscribers (endowers), whether individuals or institutions, at SAR 1,000 for the first unit,” adding “all the fund's returns will be used to support Wareef Charity's programmes in achieving its objectives and ambitions.”

Government licence

Al-Fayyadh explained that the “Alinma Wareef Endowment Fund” is licensed by the Capital Market Authority and the General Authority for Endowments, which are at the same time its regulators. He said: “The (Wareef Charity) Foundation seeks to lead the field of healthcare and social care in the Kingdom. Its mission is to support the delivery of healthcare services at the King Faisal Specialist Hospital & Research Centre General Organization by helping to ease the burden on patients and their families, funding research, and taking part in raising health awareness.”

According to the Executive General Supervisor of the King Faisal Specialist Hospital General Organization, the “Wareef Charity” Foundation looks to deliver Vision 2030, particularly the non-profit sector's contribution and raising its share of GDP from 1% to 5%, and to apply sound governance standards across all its activities and work.

According to His Excellency, “Wareef Charity's” objectives are to support scientific and applied research in the medical and health fields, to support the training of specialist Saudi medical talent, to support aid for patients in need, along with supporting cultural and scientific activities that help raise health awareness, supporting the provision of specialist medical care, and supporting disease prevention programmes.

The investment objective

Al-Hanaki denied that the fund's units would be traded on the Saudi market, as they are reserved exclusively for the endower, adding: “The fund is subject to the Investment Funds Regulations issued by the Capital Market Authority, and the fund's terms and conditions may be consulted for the channels available to follow the units once the fund begins operating.”

The Chief Executive of Alinma Investment said the investment objective of the “Alinma Wareef Endowment Fund” is to preserve the endowment's principal and grow it over the long term by investing in a range of assets under a conservative investment strategy suited to the form of the endowment and the beneficiaries specified in advance by the endowers.

He also said: “The fund manager will invest the fund's assets to grow the endowed capital, and will distribute a share of the returns annually and continuously to the fund's designated endowment beneficiaries — health and medical services — through the beneficiary body, the King Faisal Specialist Hospital Charity Foundation.”

On how the “Alinma Wareef Endowment Fund” operates, it has a fund manager, a board of directors, a Sharia committee, an executive committee, legislative and regulatory bodies, an auditor, a custodian, and accredited valuers.

Al-Hanaki noted that endowment investment funds are one of the regulated vehicles for managing and growing endowments on an institutional footing, given their legal framework and their policies on transparency and governance, alongside being subject to government oversight. Such funds allow the endowment portfolio to be diversified with a high degree of efficiency in managing the endowment, to the benefit of the endowment's principal, the endower and the beneficiary body.

He said the advantages of endowment investment funds include opening up opportunities for the public to take part, oversight, governance, transparency and disclosure, professional and specialist management, diversified investment, and management of endowers' records — as well as growing the non-profit sector's contribution in the Kingdom, which is modest compared with the global average. Among the most notable endowment investment funds worldwide is Harvard University's fund, valued in 2014 at close to 36 billion dollars.