Leading the way on ESG
BIBD Asset Management (BIBDAM) is Brunei Darussalam’s first full-fledged shariah asset manager. Launched in 2019, the asset manager is an arm of BIBD Securities Sdn Bhd, a wholly-owned subsidiary of the country’s leading Islamic institution, Bank Islam Brunei Darussalam Bhd. BIBDS offers institutional asset management, wealth management and brokerage services to its domestic clients in accordance with shariah principles.
BIBDAM prides itself on being a home grown entity, building its capacity and infrastructure internally, from investment, research, trading and execution, all supported by local talent. Since the firm’s launch, its global Sukuk strategy has been well received at home and it is now embarking on plans to tap investors in ASEAN and the Middle East. An ESG global Sukuk strategy is also in the pipeline as it seeks to capture the emerging new opportunities.
The firm views ESG as a growing capital allocation strategy brought about by the current shift on energy usage, in particular the move towards a more sustainable and ‘green’ energy regime at the expense of fossil fuels. ESG is now emerging as a fundamental priority for institutional investors across the globe. For BIBDAM, there are plans to launch ESG strategies across multiple asset classes to cater to a growing investor base that requires shariah-compliant ESG strategies.
As of 2021, the ESG funds market had an estimated US$8.9 trillion of assets under management in comparison to the nascent Islamic ESG market of US$4.4 billion, or just 0.05% of the ESG universe1. Therefore, given this opportunity, we have seen increased demand for shariah-compliant ESG strategies from institutions in countries where Islamic finance remains prevalent, says a BIBDAM spokesperson. “Our goals for 2021 will be to lead the charge as the domestic champion for ESG and socially responsible investing in Brunei and leverage our ESG capabilities to service our regional and local investors. As a first step in our ESG journey, BIBDAM intends to be a United Nations’ Principles for Responsible Investment (UNPRI) signatory,” adds the spokesperson.
BIBDAM won the Best Institutional House Award in Asia Asset Management’s Best of the Best Awards for 2021 for the country awards section while BIBD Securities won the Best Investor Education award. A third award, Best Islamic Fund House went to BIBDAM and its parent company, BIBD Securities.
In common with its peers in the transition to a digital regime, BIBDAM is boosting its service deliverables and capacity. Within the BIBD Group, a robo-advisory platform is on the agenda as it aims to extend its reach to the wider investing public. The country has a young and digitally-savvy population. As of 2020, social media penetration in the country stood at 94% – one of the highest in the world. Internet and mobile usage are also high, with 95% of the population having internet access2.
BIBDAM is cognizant of its role in contributing to the development of the country’s financial services sector. By 2035, Brunei Darussalam aims to be among the top 10 countries globally in terms of income per capita and having a vibrant and sophisticated financial services industry is central to the success of this vision. Financial services contribution to GDP by then is projected at 8%. The firm believes that with the continued support of relevant stakeholders such as policy-makers and anchor institutional investors, this goal is definitely within reach.
1 BIBDAM Research using Bloomberg March 1, 2021
2 Datareportal – Digital 2020: Brunei Darussalam