A shari’ah-compliant form of private equity (PE); it involves pooling of monetary/ financial resources of multiple “private” investors, usually high net worth individuals or business families, corporations and institutions. Islamic private equity aims to raise capital that will be invested to earn high returns, by capitalizing on the potential power of diversification and risk-taking on the basis of shari’ah-permissible modes and venues (e.g., musharakah, mudarabah, wakalah, or any hybrid combination of such modes, etc.).
Private equity also includes venture capital (VC). Islamic venture capital (IVC) is financial capital that is raised and provided to early-stage, high-potential, high-risk, start-up companies, by means of shari’ah permissible arrangements/ transactions/ structures.
