No Pain, No Gain: The State of the Industry in Light of an American Islamic Private Equity Transaction

This Article focuses on the classical Islamic contract form of sharikab as it is currently implemented by contemporary Islamic private equity transactions. A number of key issues arising from a transaction, in which the author served as counsel to an Islamic investment bank acquiring a non-controlling share in a US company, are presented below to demonstrate the increasing ability of Islamic finance to implement a greater portion of its substantive concepts-a point that demonstrates the industry's successes in its initial phase. This transaction ("subject transaction") also shows the impact of Islamic principles on conventional private equity arrangements and highlights some similarities and differences between contemporary Islamic financial practice and classical jurisprudence.