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The Pakistan Credit Rating Agency Limited

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

Mohsin Naseer
mohsin.naseer@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 Maintains Asset Manager Rating of BMA Asset Management Company Limited
 Rating Type Asset Manager
Current
(17-May-2017)
Previous
(08-Jun-2016)
 Action Maintain Harmonize
 AM Rating AM3 AM3
 Outlook Stable Stable
 Rating Watch - -

The rating reflects the company’s adequate positioning in the specific niche of separately managed accounts segment. Limited fund slate coupled with the stagnancy in the AUMs have resulted in a decline in its system share in the mutual fund segment. Adequately structured investment decision making process resulted in an average performance for the mutual fund segment. With the advent of new CEO, the company plans to enhance its position in institutions and high net worth investor space. In this regard, the management has planned to formulate a focused strategy with regards to three key segments: (a) regain its position as a leading player in the SMA segment by utilizing its brand name and historical long-term relationship of sponsors with HNW clients, (b) entering into the private equity segment by capitalizing on the synergies build through the strong presence of its sponsoring companies corporate finance division, (c) capitalizing on the potential opportunities for inorganic growth in the mutual fund segment.

The rating is dependent on the formulation and execution of its strategy resulting in enhancement in the company’s competitive position in the industry. Strengthening of the requisite human resource with a focused skill set would remain important for the enhancement of the investment management platform. Improvement in the investor services platform to cater to the targeted niche segment of the industry would be crucial.
About the Entity
BMA Funds, incorporated in April 2005 as a public limited company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a fully owned subsidiary of BMA Capital Management (BMA Capital). BMA Capital is owned by its founding members; Mr Muddassar M. Malik & Moazzam M. Malik and provides financial services. The company is currently managing two open-end funds with assets under management of ~PKR 343mln at end-Dec16 (Dec-15: PKR 358mln) and SMA portfolio of PKR 8,333mln (Dec-15: PKR 7,445mln).

Currently, BMA Funds has a five member board including CEO, Mr. Khaldoon Bin Latif. He holds Bachelor degree holder in Economics. He has over a decade experience in the capital markets in Pakistan and Bahrain. Previously, he was working as CIO in JS Investments Limited. The other board member comprises two independent directors and a founding member of the sponsoring family. Mr Muhammad Iqbal acts as the chairman of the board. He possess over four decade of expertise in financial sector.
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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