Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of Lakson Income Fund
Rating Type | Stability Rating | |
Current (30-May-18 ) |
Previous (12-Jul-17 ) |
|
Action | Maintain | Maintain |
Long Term | A+(f) | A+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The objective of the fund is to provide a competitive return on investment in a diversified portfolio of fixed income securities.
The rating reflects the fund's strong credit quality and good liquidity profile emanating from the sizeable allocation of assets in daily cash balances. At end-Dec 17, the portfolio comprised cash balances (78%) with the majority of exposure with 'AA+' rated banks. The remaining assets of the fund (i.e. 7%) were invested with TFCs and (9%) are other bank placements. The unit holding pattern of the fund is concentrated with the top10 investors representing ~84% of portfolio, however, fund has mitigated the redemption risk by staying highly liquid (78% in cash).
Going forward, the fund intends to maintain exposure in cash, some part of the investment in TFCs having good credit quality. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.
About
the Entity
Incorporated in January 2009, Lakson Investments is the investment management arm of Lakson Group, wholly owned through Siza Services (Private) Limited. Lakson Group has interests in multiple sectors including agri-business, consumer non-durables, fast food, information technology, insurance, media, paper & packaging, surgical instruments, and travel. The company is currently managing six open-end funds - covering Equity, Money Market, Income and Asset Allocation categories - with assets under management of PKR 16.7bln at end Dec-17 (PKR 14.1bln at end Dec-16). Additionally, it is managing 46 SMAs mandates amounting to ~ PKR 13.2bln (44 mandates and PKR 12.4bln at end Dec-16).
The eight-member BoD comprises four independent directors and four executives of group companies. The Chairman of Lakson Group, Mr. Iqbal Ali Lakhani, is the Chairman of Lakson Investment's board. The CEO, Mr. Babar Ali Lakhani, has vast investment management experience in local and foreign markets. Mr. Kashif Mustafa (COO), reporting directly to the CEO, is supported by nine departments consisting of Risk & Compliance, Investment, Research, Finance, Business Development, Marketing, IT, Operations and Admin.