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Allianz Global Investors, the asset management arm of the Allianz Group, with US$1.4 trillion under management, also has offices in Europe, Asia and the US.

The firm will base its Middle East operations in Bahrain, led by chief representative and head of business development for the Middle East and North Africa Sami Zghal.

As part of its initial offer to regional investors, Allianz Global Investors will market two new Shariah-compliant equity funds: the Allianz RCM Islamic Global Emerging Markets Equity Fund and the Allianz RCM Islamic Global Equity Opportunities Fund.

Nick Smith, head of fund distribution at Allianz Global Investors (UK), said: "We are very excited to be opening an office in Bahrain as well as launching two Shariah-compliant funds, specifically designed for clients in the Middle East.

"We are launching the new equity funds now for two reasons. Firstly, we believe that there is growing demand over the long term for Shariah-compliant funds, especially those based on proven strategies investing in promising areas. Secondly, we believe that recent equity market corrections have provided a good entry point for investors."

Smith’s medium to long-term view on equities is very positive and to enable the funds to get to a sufficient size quickly, it has seeded each one with US$50m.

The two funds' investments will be monitored in terms of their compliance with Islamic law by a Shariah Board, consisting of Sheikh Nizam Yaquby (chairman), Sheikh Osama Mohammed Saad Bahar (board member), and Dr Muhammad Humayon Abbas Dar (expert member and chief executive officer of BMB Islamic UK).