The Pakistan Credit Rating Agency Limited
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Muhammad Azmat Shaheen

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PACRA Maintains Asset Manager Rating of Lakson Investments Limited

Rating Type Asset Manager
(26-Aug-22 )
(27-Aug-21 )
Action Maintain Maintain
AM Rating AM2+ AM2+
Outlook Stable Stable
Rating Watch - -

The rating incorporates the well defined strategy of Lakson Investments Limited (the "Company") to cater to the investment needs of institutional and high net worth investors. A strong ownership and governance profile provides support to the rating. The Company has a well defined organizational structure, strong risk management framework, seasoned management team, innovative products and a structured investment process. The Company has a diversified product slate comprising CIS, SMA and PE/VC which distinguishes it from other AMCs. The fund mix has tilted towards money market category, in line with industry peers. Lakson Investments Limited is the only asset manager in Pakistan, which offers both domestic and internationally focused funds. The investor concentration at fund level decreased to 44% at end-Jun'22 from 72% at end-Jun'21. The AUMs in terms of CIS witnessed a growth of 11.5% to stand at PKR 25.3bln at end-Jun'22 (Jun'21: PKR 22.7bln). However, the market share declined to 2.0% at end-Jun'22 (Jun'21: 2.2%) as the industry grew at a faster pace. To augment its revenue stream, the Company is offering specialized investment products which includes Separately Managed Accounts with AUMs of PKR 9,461mln at end Jun'22 (Jun'21: PKR 11,110mln). The Private Equity and Venture Capital Funds are 100% drawdown and have a combined size of PKR 3.6bln out of which PKR 2.3bln pertains to PE and PKR 1.3bln to VC. The overall performance of the money market, income and equity funds remained competitive and exceeded the industry averages. The Company remained profitable during the review period and has an adequate equity base. The rating incorporates the Company's association with Lakson Group, a leading business conglomerate in Pakistan having investments in multiple sectors.
The rating is dependent on the Company’s ability to strengthen its market position in terms of AUMs, sustaining superior fund performance and upholding robust investment framework. Meanwhile, diluting investor concentration and successful execution of strategic initiatives is important.

About the Entity
Lakson Investments Limited (the "Company") was incorporated as an unlisted public company in 2008. The Company is a wholly owned subsidiary of Lakson Group, through its holding company SIZA Services (Private) Limited. Lakson Group was established in 1954 and is owned by the Lakhani family. It is among the leading business conglomerates in Pakistan and has interests in multiple sectors, including agri-business, consumer non-durables, fast food, information technology, financial services, media, paper and board manufacturing, printing and packaging, surgical instruments and travel. The CEO, Mr. Babar Ali Lakhani, possesses research and portfolio management experience with domestic and international institutions. Mr. Kashif Mustafa, Executive Director and COO has more than a decade's experience of capital markets with local and international brokerage houses and leading asset management companies.
The control of the Company vests in six members board of directors, chaired by Mr. Iqbal Ali Lakhani, who is also the chairman of the Lakson Group. There are two independent and three non-executive directors. The company’s fund slate is composed of six open-end funds belonging to all major categories which includes asset allocation, equity, income, Shariah Compliant asset allocation and money market. The total assets under management stand at PKR 38.4bln at end Jun'22.

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.