SAFTAR Sarwar, a rising star of Barclays' growing wealth management team in Scotland, is struggling, eyes widened, to find the right words.
Clearly, we've reached a subject he is not keen to open up on. His public-relations man intervenes, saying it is beyond the scope of this interview. Yet I had thought this was where the discussion was leading, to a subject coiled and ready to spring
out into the light: the radicalisation of Muslim young people.
The subject had arisen as we are talking about Asian wealth, in the UK and in the Middle East, and the influence it has on banking. It seemed natural the wider area of politics should be touched on. But first, the context. Over the past ten years Islamic principles have been shaping the structure of financial transactions worldwide. Demand for Sharia-compliant products is booming.
Barclays, through its Global Investors division, has a well-developed Islamic finance offer – not only did it launch three Sharia-compliant investment funds in December of last year, but it was also involved in the execution of an Islamic bond structure, called a sukuk, used to finance the acquisitions of P&O by Dubai Ports World and Aston Martin by a consortium involving Muslim investors.
For Sarwar, Islamic products are an important part of the mix he sells. Not all of his clients are Asian Scots, but he agrees that he has a natural advantage when it comes to working with this community. As the first son of an emigrant from Pakistan, who set up a series of shops in Glasgow, Sarwar is fluent in Urdu and Punjabi.
As an economics graduate with years working at investment firm Baillie Gifford, as well as a five-year stint developing a private wealth management division for law firm Lindsays, he is well versed in investment trends, products and even how to invest when markets are going sour. As Sarwar sees it, he is in an ideal position to bring sophisticated investment strategies to a pool of wealthy entrepreneurs who, traditionally, have not considered them. He calls it a gap in the market.
"These people came here in the 1960s, certainly my father's generation have done well for themselves, worked hard, been entrepreneurial," he says. "My experience is I don't think they have ever had appropriate wealth management before. Either through lack of dialogue or lack of knowledge or they never understood it, or the banks have never known how to approach them."
There are about 100,000 Scots of Asian descent, a significant proportion are of Muslim and Pakistani origin. If you look at the latest Rich List, some have been doing very well – including the Khushi brothers, who own the Trespass outdoor wear chain, and the Tulis, who made their fortune in clothing retail. Not all are this rich, but research by Scottish Enterprise has found Scotland's Asian entrepreneurs are punching above their weight in terms of starting up businesses.
According to Sarwar, until now some of this wealth has been invested back home – buying farms for family on the subcontinent, or on property in the UK. Now they are ready to invest in more liquid assets, particularly those that have an emotional resonance. "Last year, we had a very successful Indian real estate fund that was taken up by a lot of UK clients. It is giving added value and different products and ideas. A lot of people are interested in commodities and precious metals and overseas property."
Islamic investments are particularly exciting for Sarwar, where he sees the demand for products growing among his client base. "When other economies may well be struggling in light of the global downturn, it is acknowledged by everybody that the Middle East and Asia is doing well. "The market (for Islamic products] will grow. The Asian community generally are becoming wealthier. , more entre-preneurial. The Muslim community are equally following that path. Most are wanting more-sophisticated solutions. Some might just want conventional wealth management and banking, but some may say 'I've retired and I've collected a lot of wealth, I want to give something back'. A lot of them, as they get older, might move towards their religion; they might say they want to go down that road. It is about giving people choices."
It is not the first time there's been a gap in the market offering services to British Asians. In areas of finance, business development and support, there is a general feeling among the Asian business community and business advisory services that more could be done to level the playing field between the mainstream and Asian businesses.
For his part, Sarwar, along with Amjid Akram, the former ethnic enterprise adviser for Edinburgh Chamber of Commerce, have launched the Institute of Asian Professionals Scotland (IAPS). It represents a network of Asian business people whose mission is to act as a representative voice for the Asian business and professional community.
"We've had the CBI and the Institute of Directors, we think there is a gap in the market for Asian professionals getting together, engaging and maybe doing business together and sharing knowledge," says Sarwar. "That didn't happen from our parents' generation for whatever reason."
Yet there are other, more troubling gaps – such as the high levels of unemployment among British Asian youth."That needs to be addressed, specifically in the cities and mainly in Glasgow," says Sarwar.
Mentoring is important, essential even. Sarwar himself would have welcomed a friendly Asian face in a position of influence when he was starting out. And part of what IAPS does is focus on engaging young people.
"We try and give people out there who are maybe now going to university or looking for careers good role models as well and say you can do it, we can help you in some respects. I get a number of CVs coming in. I'm happy to fire them across to the relevant part of the Barclays organisation. I struggled when I was 20 from university. It was part economic: I graduated in the early 1990s in a downturn. For whatever reason it was hard."
This is when I bring up the difficult subject, of the angry, disenfranchised young Muslim men in Scotland who turn away from university and careers and instead turn to radical and dangerous ideas – is this the sort of thing that might help? But the question is too loaded, too personal perhaps. He snaps the lid shut. He has views, he admits, but he doesn't want to discuss them or he doesn't feel comfortable discussing them. I cannot blame him. Over the years in speaking to British Muslim business people, I have found that some are more comfortable discussing their concerns than others.
But that was before the attack on Glasgow airport, and before the conviction of Clackmannanshire student Mohammed Atif Siddique for terrorism offences, and before his lawyer, Scottish human rights activist Aamer Anwar, was charged with contempt of court after making a statement in which he called the conviction "a tragedy for justice and freedom of speech".
Clearly, these events have made the atmosphere more febrile, and less conducive to an open discussion. It may be unfair to ask Sarwar about these issues. He's not a cleric or a social worker. He is, after all, a banker. As a ten-year-old, working his holidays and weekends in his father's shops, he had his nose in the financial papers. It was, for him, a way of learning about finance and the world.
But if Sarwar does not want to express his views on radicalism in public, he is certainly happy doing so on finance. As the balance of world financial power shifts towards the vast wealth of the Middle East, the future, for finance at least, is looking increasingly Islamic.
"There is massive wealth in the Middle East and people are saying we want a choice. Ten years ago, they didn't have a choice in terms of an Islamic mortgage or a loan or an investment, but because we have these fantastic systems in place and technology, we want to do it this way. Now banks are sophisticated and they can do that, they are fulfilling a need.
"Where there is demand we will follow and create structures around that. It is very much driven from a commercial aspect. You have seen the massive wealth generated out there. That is the way I would look at it."
COMPLYING WITH ISLAMIC LAWISLAMIC finance is not that different from conventional western finance, except that Islam embraces the ancient prohibition on the charging of interest, or usury.
Mortgages and bonds are structured so that interest and yields are replaced with rental payments and income. Investment is prohibited in alcohol, tobacco, pornography and weapons.
Sharia-compliant investments do not rule out oil and gas as an asset class – some of the main drivers behind the growth of Sharia-compliant wealth management are Saudia Arabia and Dubai. It is estimated that more than $500 billion (£257bn) of assets are managed according to Islamic investment principles.
Of Britain's two million Muslims, many do not use established banking services. Demand for Sharia-compliant mortgages was estimated to be worth £4.5bn in 2006.
Several western banks have developed Sharia-compliant policies and products, including Barclays, UBS, Lloyds TSB and HSBC.
The full article contains 1567 words and appears in The Scotsman newspaper.
