PACRA Assigns Initial Asset Manager Rating To 786 Investments Limited (Formerly: Dawood Capital Management Limited)
|Rating Type||Asset Manager|
The rating reflects the company’s adequate positioning in the industry, improved investment process and new but experienced management team. With a limited fund slate, the company managed decent growth in the AUMs in CY17. This has resulted in a rise in its system share in the mutual fund segment, though it is still less than 1%. The company has rebranded itself and is positioning itself in Shariah compliant genre of mutual fund industry. It would be amongst few exclusive Shariah compliant asset manager. The team and processes are in place. Now the focus is on completing basic fund slate by adding an Islamic equity fund, this would be followed by marketing/distribution push. The management is eyeing PKR2 bln AUMs by end of FY19. In CY17, the performance of the funds was comparable to most peers. The management intends to materialise its strategic plans by enhancing its position in industry coupled with major focus on high net worth and corporate clientele.
The rating is dependent on the successful execution of company’s strategy resulting in enhancement in the company’s competitive position in the industry. Strengthening of the human resource with a focused skill set would remain important for the enhancement of the investment management platform. Relative performance of funds remain critical.
786 Investments Limited (Formerly: Dawood Capital Management Limited), commenced its business operations back in 1993. Later on, First Dawood group took over the company, and currently owns ~50% stake. The other key shareholder (15%) in Bank of Khyber. First Dawood Group, a renowned business group, has interest in family takaful, modarba, and Shariah investment advisory. With an AUM base of PKR 657mln at end Dec-17, 786 Investments is managing three open end funds; categorised as Shariah compliant asset allocation and conventional Funds.
786 Investments has a seven member board including the CEO, Ms Tara Uzra Dawood. She holds a Doctorate in judicial science from Harvard Law School. She is on the board of directors of MUFAP and has around two decades of professional experience in mergers and acquisitions, corporate law and investment management. The other board members comprise three independent directors including Mrs Shafqat Sulatana, also the chairperson of the board. She is a professional banker and possess around four decades of experience in financial sector. The company has a lean management structure. The team is largely new to 786 Investments but comprises seasoned professionals.