Establishing world’s largest retakaful group Khazanah is pleased to announce that it has signed an agreement with Dubai Banking Group (“DBG”) and Asia Capital Reinsurance (“ACR”) to form the world’s largest retakaful group, ACR ReTakaful Holdings Limited (“ACR ReTakaful”). Khazanah and DBG will each directly hold a 40% interest in ACR ReTakaful while ACR will hold the remaining 20%. By virtue of Khazanah’s 32% stake in ACR, it would have the largest effective shareholding in ACR ReTakaful.

ACR ReTakaful will have a capital base of USD300 million, and will have two operating companies in its stable, to be based in Kuala Lumpur and the Middle East.

The official signing ceremony was held today in Dubai with Khazanah represented by its Managing Director, Dato’ Azman Hj Mokhtar and DBG by the UAE Minister for Cabinet Affairs and Chairman of Dubai Holdings, Mr Mohammed Al Gergawi. The signing was witnessed by YAB Prime Minister, Dato’ Seri Abdullah Hj Ahmad Badawi.

Commenting on the agreement, Dato’ Azman said that the establishment of a retakaful operator is the latest in a series of initiatives undertaken by Khazanah to support the development of Islamic financial services in which Malaysia has been at the forefront. “The rationale for ACR ReTakaful is the same as the aspiration behind the Malaysia International Islamic Financial Centre (“MIFC”) initiative.”

“This is an exciting investment for us, as it consolidates Khazanah’s position as a key player in the regional reinsurance and retakaful sector,” said Dato’ Azman. This follows Khazanah’s earlier investments of USD200 million into ACR to emerge as the joint largest investor, as well as RM175 million into ACR Malaysia to become the major shareholder in the Kuala Lumpur-based reinsurance company.

“We have had a vision for a global retakaful player since our investment into ACR in December 2006, and this retakaful company is the fulfillment of a condition from that transaction. We believe ACR ReTakaful is poised to become a major player in the global retakaful business, not least due to the extensive pan-Asian business networks of Khazanah and DBG, as well as the expertise provided by ACR.”

Khazanah, adds Dato’ Azman, “expects this investment to increase the retention of reinsurance and retakaful within Malaysia as well as to catalyse the development of the local takaful industry.”