PACRA Maintains Stability Rating of 786 Smart Fund

786 Smart Fund ( or the ‘Fund’) is a moderate-risk profile fund. The obiective of the fund is to provide competitive risk adjusted returns to its investors by investing in a diversified portfolio of long, medium and short term Shariah compliant debt instruments while taking in to account liquidity considerations. They include iijara-sukuks and musharakah. Shariah compliant debt instruments plays a significant role in Islamic finance by providing alternative financial solutions that aligns with the beliefs of partcipants in the financial market. The Fund had allocated ~46.3% in AAA rated corporate sukuks , ~27.4% in bank placements in AA rated banks and ~26.4% in other avenues at the end Dec’23. The WAM of the Fund stood at 2 days at end Dec’23; hence limited exposure to credit risk , and the duration of Fund is 775 days exposing high interest risk . The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~85.47% of the Fund's assets at the end of Dec'23; exposing the Fund to a very high level of redemption pressure.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.

About the Entity
786 Investments Limited is a public listed company and was founded in 1990 with Asian Development Bank being its co-sponsor. The Company commenced business operations of venture capital financing in 1993. Later, in 2002, First Dawood Group in partnership with Asian Development Bank, converted the Company's business operations to asset management. The key shareholders are First Dawood Investment Bank (15%), Bank of Khyber (15%), B.R.R. Guardian Modaraba (~13%), and Miss Tara Uzra Dawood (~18.5%). The remaining shareholding of ~45% is held by other individuals and entities. The Company had AUM's of ~PKR 851.68mln at end of Dec’23.
786 Investments Limited has a seven-member board including the CEO, Ms. Tara Uzra Dawood. She holds a Doctorate in judicial science from Harvard Law School. She has around two decades of professional experience in mergers and acquisitions, corporate law and investment management. She is supported by an experienced core management team. The other board members comprise four independent directors including Mr. Ahmed Salman Munir, who is also the Chairperson of the board. He has more than 30 years of progressive experience working with Fortune many companies both inside and outside Pakistan.