A firm based on the Isle of Man has delayed plans to raise around $400 million for the world's first publicly traded diamond fund.

An initial public offering tomorrow has been postponed until further notice, with no explanation why.

Diamond Circle Capital Fund says it intends using 90% of the placing proceeds to buy a portfolio of diamonds, polished and coloured and worth at least $1million each, with the rest invested in sharia compliant products.

There is a predicted $7 billion global supply shortfall of diamonds by 2012, as mining capacity struggles to keep up with demand, especially for high quality stones.

The company was founded by fund manager Diapason Commodities Management.