PACRA Maintains Asset Manager Rating of 786 Investments Limited

786 Investment Limited ("786IL" or the "Company") reflects its modest positioning in the competitive asset management industry. 786IL is a small Asset Management Company. The AUMs of the Company increased by ~12% to ~PKR 719mln at the end Sep'23 (SPLY: ~PKR 643mln) out of which 367.7mln ( 51%) is from a related party(group). However, the market share declined to 0.04% from 0.05% at end-Sep’23 as the market grew at a faster rate of 37% since Sep'22. The Company has only one Fund, namely, 786 Smart Fund, which falls under Shariah compliant Income category. Diversification in AUM asset class distribution would be considered positively from a Management Quality ratings purview. To strengthen the fund slate, the AMC is working on launching the new fund in the Islamic Money Market category. The Fund's performance has been improved as the return of the Fund outperformed the industry average and its benchmark. Sustenance of fund performance along with maintenance of credit quality metrics will remain important for rating, going forward. The rating also incorporates the Company's good governance framework, experienced management team, and adequate organizational structure.
On the financial profile side, the management fee is PKR 13mln at the end of Jun'23 (Jun'22: PKR 13mln). The profit of the Company increased to PKR ~10mln in Jun'23 (Jun'22: PKR ~1mln). The profitability has been increased on the back of capital gain on sale of investment. While the equity of the company stood at PKR ~241mln at end Jun'23 (Jun'22: PKR ~231mln) meeting the
The rating is dependent on the materialization of strategy to enhance AUM's and the market position of the Company. Meanwhile, maintaining strong fund performance and diversifying fund slate is important. Upholding high governance standards and strengthening of risk management is crucial for the rating.

About the Entity
786 Investments Limited is a public listed company. incorporated in Pakistan. The Company is registered as NBFC under the NBFC Rules,2003. The Company has the license to carry out Asset Management Services along with the license of Investment Advisory Services under the NBFC Rules, 2003, and NBFC Regulations, 2008. The Company was founded in 1990 and commenced business operations of Venture Capital Financing in 1993. Asian Development Bank (ADB) was its cofounding sponsor. In 1999, the Company was acquired by the First Dawood Group. Later, in 2002, First Dawood Group in partnership with Asian Development Bank, converted the Company's business operations to asset management. Then, in January 2017, the Company's name changed from Dawood Capital Management Limited to 786 Investments Limited to better reflect its focus on Islamic asset management. The Company's major shareholding vests with the First Dawood Group through First Dawood Investment Bank Limited (15%), Bank of Khyber (15%), B.R.R. Guardian Modaraba (~13%) and Miss Tara Uzra Dawood (~12%). The remaining shareholding of ~45% is held by other individuals and corporate entities. The Company's Board of Directors currently comprises seven board members out of which, four are independent and two are non executive. The board members have strong educational backgrounds and carry extensive experience. The Chairperson, Mr. Ahmed Salman Munir, possessing more than 30 years of professional experience in banking industry. The AUMs of the company stood at PKR 719mln in the end Sep'23.