The Pakistan Credit Rating Agency Limited
09-Aug-19
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Asset Manager Rating of AKD Investment Management Limited
| Rating Type | Asset Manager | |
|
Current (09-Aug-19 ) |
Previous (08-Feb-19 ) |
|
| Action | Maintain | Maintain |
| AM Rating | AM3++ | AM3++ |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating incorporates the company’s corporate governance structure, experienced management team, structured investment management process. The rating reflects the company’s capacity to manage the risks inherent in asset management. However, the rating is constrained by relatively small market share (<1%) and high concentration in investor base. The company has a resourceful human resource base in order to strengthen the organizational structure and enhance the quality of processes. The company’s AUM were at ~PKR 4.4bln at end June-19, depicted a decrease of ~24% as compared to AUM of ~PKR 5.8bln at end June-18. Due to outflow of the AUM, the overall market share of the company witnessed a decrease from 1% in June-18 to 0.8% in June-19. The diversification of AUM base among various fund categories and expansion in the fund slate along with improvements in the overall operating platform will bode well for the company. Meanwhile, customer outreach through different channels and fund performance in line with the rating remains imperative.
The rating is dependent on materialization of the management’s efforts to increase its market share, while achieving diversity in investor as well as an overall asset base. The company’s ability to successfully execute its business strategy and optimal utilization of its resources and group name remains imperative. Meanwhile, sustained fund performance and strengthening of core process is critical.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The company is sponsored by Aqeel Karim Dhedhi Securities (Pvt) Limited (99.97% ownership). Aqeel Karim Dhedhi Securities (Pvt) Limited is majority owned by Mr. Aqeel Karim Dhedhi, Chairman of the AKD Group, a renowned figure in Pakistan's capital market.
The Board of Directors of the company comprise seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The company is currently managing six open-end funds and one closed-end fund with assets under management of ~PKR 4.4bln at end June-19