Provider Spotlight: Ghaf Benefits (by Lunate)
This is the third article in our series profiling the licensed providers of the UAE's alternative End of Service Benefit (EOSB) savings scheme — one Fund Manager at a time, in alphabetical order.
Lunate is a different kind of entrant to this market. Rather than a bank offering EOSB to its client base in addition to many other financial products, it's a dedicated asset manager that built a purpose-made platform, branded "Ghaf Benefits", specifically for UAE's new EOSB scheme. The pitch is straightforward: a large, well-capitalised investment house lending its fund management muscle to gratuity savings, with more fund choice on offer than most of its peers.
Who is Lunate?
Lunate Holding RSC Limited is an Abu Dhabi-based independent alternative investment manager, and the group describes itself as the largest ETF issuer and manager in the MENA region. Group-wide, Lunate manages upwards of USD 110 billion through more than 170 employees and 90-plus investment professionals, with an investor base spanning the UAE, Kuwait, India, Egypt and the United Kingdom across more than five geographies and 40-plus industries.
The EOSB scheme itself sits with Lunate Capital LLC, a subsidiary of Lunate Holding and the entity duly licensed and regulated by the UAE Capital Market Authority (CMA) as investment manager of the scheme. Lunate in turn is owned by Lunate is majority-owned by Chimera Investment LLC, the private investment firm overseen by H.E. Sheikh Tahnoon bin Zayed Al Nahyan. Lunate markets the offering to employers and employees under its own consumer-facing brand, Ghaf Benefits.
The EOSB offering
Ghaf Benefits gives employees a choice across three strategies, each available in a conventional and a Shariah-compliant version — six sub-funds in total, all UAE-domiciled, AED-denominated and CMA-regulated:
Capital Protection — the default and most conservative option. It invests exclusively in deposits with UAE-licensed banks and short-term fixed income instruments issued or guaranteed by the UAE Government, with a maximum weighted average maturity of 180 days. Employees who don't actively choose a fund, and employees who don't meet the "skilled worker" salary and qualification thresholds, are placed here automatically.
Global Conservative — a predominantly fixed income strategy (minimum 80% bonds, maximum 20% equities), built from a globally diversified, actively managed portfolio of ETFs spanning high-yield, investment-grade, government and emerging market bonds, weighted heavily to the US.
Global Balanced — the highest-risk of the three, targeting roughly 60% global equities against 40% fixed income, again assembled from a broad ETF portfolio diversified across sectors and geographies.
As with other alternative EOSB providers, employers make the ongoing contributions on employees' behalf, and employees can add voluntary top-ups of their own and switch between the six funds through Lunate's online portal and mobile platform as their goals or risk appetite change.
Who's behind the scenes
Per the group's own materials, Lunate has assembled a recognisable institutional roster to support the scheme: Bank of New York Mellon (BNY) is Lunate's strategic partner, and SS&C the technology provider. Dar Al Sharia provides Shariah oversight for the Islamic sub-funds, Deloitte is named as auditor, and A&O Shearman as legal advisers and First Abu Dhabi Bank (FAB) as the UAE custodian.
Worth flagging
One detail worth bearing in mind when comparing Ghaf Benefits to other providers: its Capital Protection fund is built from deposits with UAE-licensed banks and short-term instruments issued or guaranteed by the UAE Government, rather than described around a specific reserve or loss-absorption mechanism of the kind some other providers highlight. As we stated in a previous article already, employers comparing "capital protection" language across providers should be mindful of the fact that different approaches exist, and each approach has its pro’s and con’s.
The bottom line
Lunate brings genuine scale and fund management expertise to the EOSB market, but the standout point is this: Ghaf Benefits already has six live funds spanning three risk profiles, each with a conventional and a Shariah-compliant version. Other providers in this market have announced various risk-based funds beyond their initial capital-protected offering — but Ghaf Benefits appears to be the first to actually have that fuller range up and running today, rather than still in the pipeline. For employers and employees who want real choice over how gratuity savings are invested right now, that's a meaningful head start.
For help comparing and evaluating providers for your organisation please get in touch with us.
GratuityAdviser is operated by Lux Actuaries Financial Consulting L.L.C., which holds a Category 5 (Financial Consultations and Introductions) licence from the UAE Capital Markets Authority.
