History of Islamic Asset Management
         I have been involved in   Islamic banking since around 1985, when I was asked to help edit some of the   very first issues of what later became a prominent Islamic finance journal. Back   then one big debate was on whether zero-coupon corporate and government bonds   were sharia compliant. We were understandably naïve, as no one at that time had   addressed some of the core issues surrounding the precise definition of Islamic   banking.
         
         Since then the industry has skyrocketed, in particular since   2002 and the modernization of much of the banking sector in the Middle East.   Just as conventional banks in the Arab world were upgrading and updating systems   and procedures, so did the Islamic banks. Moreover, some key figures emerged to   help standardize the process of at least thinking about basic rules and   principles of Islamic banking. Among them were Mohamed El Gari, Humayon Dar and   Mohamed Daud Bakr, to name only a few of the most notable pioneers. These   Islamic scholars placed the first level surface on which banking professionals   could begin developing products and services that met both sharia and   international banking standards.
         
         As I’ve repeated often, however, very   little of this innovative and ground-breaking work entered the Islamic asset   management space. Rather, it was retail, corporate and investment banking that   benefited from the professionalization of Islamic banking. Asset management   seemed to have been the poor stepchild, less exciting and less rewarding to the   professionals than high-volume retail banking or highly compensated investment   banking.
         
         Now, however, we have the tools and knowledge to make Islamic   asset management a reality. Whether institutional investing for pension funds,   takaful insurance companies, or corporate treasuries, or retail investing for   households, the technology exists to professionally create, manage and   distribute Islamic mutual funds and other assets on a wide scale.
         
All   that’s missing are banking institutions willing to follow the path. Strangely   enough, we witness enormous demand, yet almost no supply.