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The Pakistan Credit Rating Agency Limited

Date
16-May-2017
Analysts
Rai Umar Zafar
rai.umar@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Asset Manager Rating Methodology (Jun 16) [View]

Related Research

  • Sector Study | Asset Management (Apr 17) [View]
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PACRA Upgrades Asset Manager Rating of Alfalah GHP Investment Management Limited
 Rating Type Asset Manager
Current
(16-May-2017)
Previous
(08-Jun-2016)
 Action Upgrade Harmonize
 AM Rating AM2+ AM2
 Outlook Stable Stable
 Rating Watch - -

The rating reflects AGIML's well-structured investment management framework, sound operating platform, and an experienced management team. It incorporates well diversified product slate and enhanced integration with the parent bank. Timely launch of new funds has attracted decent investments; hence, lending support towards enhancement of the system share. Retail portion adds diversity to the AUM base and provides support to the business. The company has planned to strengthen its marketing team to further penetrate the retail market. The fund performance has consistently remained above the set benchmarks. However, consistency in the performance ranking in comparison to industry is yet to be seen. Furthermore, it plans to form a separate research team which will support the investment decision making process.

The rating is dependent on the company's ability to successfully capitalize on its parent bank's network for achieving growth in AUM's while improving fund mobilization from retail segment. Meanwhile, consistency of fund performance remains crucial.
About the Entity
Commencing operations in Mar 05, Alfalah GHP Investment Management Limited (AGIML) is 82% owned by Abu Dhabi Group, including 40% through Bank Alfalah Limited (BAFL) and 42% through MAB Investments Inc. Meanwhile, GHP Arbitrium Holdings Limited (GHP) owns 14% stake. BAFL is the sixth largest commercial bank of the country with a branch network of over 500 branches. AGIML is currently managing sixteen open-end funds with cumulative assets under management of PKR 36bln at end-Mar17.

The company's six member BoD comprises CEO, two representatives of BAFL, one representative of GHP Arbitrium Holdings Limited, one representative of MAB Investments and one independent director. The board is chaired by Mr. Ali Sultan, Group Head - Treasury, Investments & Financial Institutions, Bank Alfalah Limited. The CEO of AGIML, Ms. Maheen Rahman, has over 17 years of rich local and international experience in the financial services. She is assisted by an able team.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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