Mohamed A CHATTI and Ouidad YOUSFI (2010/2011)
Islamic Private Equity
In: Opportunities in Islamic Finance: Unconventional answers to the credit crisis, Ed. Brian KETTEL. CPI Financial, chap. 11, pp. 113-128.
The Islamic private equity (IPE) market has grown dramatically over the last few years. There are some similarities between venture capital (VC) and some traditional
methods in Islamic financing. In medieval Islamic societies it is hard to pinpoint
the starting of IPE but there were partnership arrangements similar to those practiced in
conventional private equity (PE). But both academicians and professionals argue that the
VC activity started in 1946 when General Doriot, a French born and a Harvard educated
businessman, established the American Research and Development Corporation (ARDC).
It grew in Silicon Valley in the 1970s. Intel and Microsoft are amongst the most famous
projects financed through VC. Without the intervention of venture capitalists none of these
would have seen light of day or at least achieved such a spectacular rate of development in
such a short period (Queyrel, 2006).
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