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The Pakistan Credit Rating Agency Limited

Date
22-Dec-2017
Analysts
Rai Umar Zafar
rai.umar@pacra.com

Ahmed Sheikh
ahmed.sheikh@pacra.com

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

  • Methodology | Asset Manager Rating (May 17)

Related Research

  • Sector Study | Asset Management (Apr 17)
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PACRA Maintains Asset Manager Rating of Lakson Investments Limited
 Rating Type Asset Manager
Current
(22-Dec-2017)
Previous
(15-May-2017)
 Action Maintain Upgrade
 AM Rating AM2+ AM2+
 Outlook Stable Stable
 Rating Watch - -

The rating reflects Lakson Investments strong governance practices, robust risk management framework, and elaborate decision making process. The rating incorporates the company’s well though strategy of creating a niche in institutional and high net worth investor space. This should enable it to capture volumes in otherwise crowded asset management industry. It is approaching its target market through three streams a) Mutual Funds, b) SMA, and c) Private Equity. The management has concerted efforts towards effectively utilizing group's established brand coupled with sound operating platform and strengthened investor services. The company has successfully launched a Private Equity fund. The company has affiliated with a London based firm to enhance its risk management process. Lakson has strong research function which provides various analysis to support the fund management team to generate consistent fund performance. Although a source of concentration, group/family investment provides stability to AUMs.

The rating depends on the company’s ability to implement its strategy of building volumes (institutional & high net worth) without going deep into retail segment. While, strong and stable performance in SMAs and Mutual funds remain imperative. Given relative newness of Private Equity concept in Pakistan desire to acquire shareholding in companies for private equity fund is critical.
About the Entity
Incorporated in January 2009, Lakson Investments is the investment management arm of Lakson Group, wholly owned through Siza Services (Private) Limited. Lakson Group has interests in multiple sectors including agri-business, consumer non-durables, fast food, information technology, insurance, media, paper & packaging, surgical instruments, and travel. The company is currently managing six open-end funds - covering Equity, Money Market, Income and Asset Allocation categories - with assets under management of PKR 15.6bln at end Oct-17 (PKR 14bln at end Dec-16). Additionally it is managing 48 SMAs mandates amounting to ~ PKR 14bln (44 mandates and PKR 12.4bln at end Dec-16). Recently launched Private Equity fund with $ 25mln asset under management .

The eight-member BoD comprises four independent directors and four executives of group companies. The Chairman of Lakson Group, Mr. Iqbal Ali Lakhani, is the Chairman of Lakson Investment's board. The CEO, Mr. Babar Ali Lakhani, has vast investment management experience in local and foreign markets. Mr. Kashif Mustafa (COO), reporting directly to the CEO, is supported by ten departments consisting of Risk, Compliance, Investment, Research, Finance, Business Development, Marketing, IT, Operations and Admin.
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.