Islamic scholars have long disagreed about the merits of hedge fund investments. To many, common hedge fund techniques such as short selling and leverage can never be squared with the principles espoused by sharia. To others, concepts used successfully in other spheres of Islamic finance - for instance, the sukuk market - can be tweaked to make hedge fund investment acceptable.
For a small but growing number of banks, the hope is that the second interpretation will win Islamic investors over. Ke