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The Pakistan Credit Rating Agency Limited

Date
08-Jun-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 Upgrades Asset Manager Rating of AKD Investment Management Limited
 Rating Type Asset Manager
Current
(08-Jun-2017-)
Previous
(08-Jun-2016)
 Action Upgrade Harmonize
 AM Rating AM3++ AM3+
 Outlook Stable Stable
 Rating Watch - -

The rating captures the company's improved investment process, reasonably experienced management team, and enhancement in operating platform. The AUM growth of the company remained in line with the industry resulting in a largely maintained system share. The company continues to expand its human resource base in order to strengthen the organizational structure and enhance the quality of processes. The group strive to give positive grandeur to AKD’s brand after adjournment of the legal investigation against the group. The rating takes cognizance of the company's ability to outperform peer funds in equity category, distinguishing AKDIML in the domestic industry. However, it needs to witness performance improvement in the fixed income category. High concentration - both in terms of investors and type of mutual fund, and low contribution from the retail segment needs attention.

The rating is dependent upon the company's ability to successfully execute its business strategy encompassing enhancement in system share and expanding the retail investor base. Diversification of its existing fund slate in the Shariah-Compliant category would help in boosting the AUM base of the company. Upholding existing organization structure along with retention of key human resource remains imperative for AKDIML. At the same time, liquidity management, given certain exposure to illiquid stocks, remains important.
About the Entity
AKDIML, an Asset Management Company under the Non-Banking Finance Companies Rules, 2003, is a wholly owned subsidiary of Aqeel Karim Dhedhi Securities (Pvt) Limited (AKDSPL). AKDSPL is majority owned by Mr. Aqeel Karim Dhedhi - Chairman of AKD Group - a renowned figure in Pakistan's capital market. The company is currently managing four open-end and one closed-end fund with assets under management of ~PKR 7.2bln at end-Feb17. The BoD of AKDIML comprises seven members, including its CEO and an executive director. The remaining directors comprise two non-executive and three independent members.

The CEO, Mr. Imran Motiwala, a graduate, carries extensive experience in asset management; he has been associated with AKDIML since 2006 and is supported by a team of qualified individuals. Ms Anum Aqeel Dhedhi is the CIO having a BSc in Financial Economics. She has previously worked at the research department of group's brokerage house.
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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