Private Equity Funds

[Rehan_Yazdani]

As-salamu alaykum,
I am currently a student in the US and I am considering investment banking after I get my bachelors degree. I plan in working in a M&A boutique firm because that is the only halal job within investment banking. While researching investment banking I saw many exit opportunities that investment banking can lead to and the one that caught my attention was private equity. I want to ask if it is permissible to work in private equity firms such as Blackrock, KKR, etc. Their strategy is to buy businesses and increase their value but they use a lot leverage. I would also like to ask if private equity is halal, is carry halal. Many high level positions at private equity firms offer carry which is a share of the profits the fund makes.
Jazakallahu khairun

[Mufti_Faraz_Adam]

Assalaamu alaykum,

Kindly see the following:

Investment Banking / M&A careers

Assalaamu Alaykum dear brother, There is a difference of opinion on this matter with scholars on both sides and good arguments on both ends. My teachers and colleagues are of the view that it depends on multiple factors and a one-size-fits-all answer does not always work. With regard to seeking a job, as a principle, one should seek to be employed in a Shariah compliant firm. Islam is a values-based system of life and we should seek to be in places which align with the values and morals we be…

In regard to the carry, it all depends if the private equity is Shariah compliant. If it is Shariah compliant, the carry will be permissible. If not, then receiving equity and dividends will not be Shariah compliant.