PACRA Assigns Initial Asset Manager Rating to Al Meezan Investment Management Limited
|Rating Type||Asset Manager|
The rating reflects the company’s leading position in the asset management industry as one of the largest asset managers (largest Shariah Compliant Asset manager in Pakistan). The rating incorporates the company’s strong control environment, structured investment process and governance framework, qualified management team and solid track record of AUM growth. The company has separate Compliance and Audit function and in compliance with best practices and has fortified its equity management team. Al Meezan enjoys a robust and diversified customer base, with a high proportion of retail customers compared to peers, which has proved sticky over the years. The company’s association with Meezan Bank Limited – largest Islamic bank – and ensuing synergies have supplemented fund growth. With a comprehensive portfolio of sixteen open-end Shariah Compliant mutual funds, Al Meezan offers a wide range of products for its customers, although it cannot offer certain conventional products when compared to peers. The company’s fund performance remained sub-par during FY18 and lagged benchmarks. However, it has been improving lately. Going forward, maintaining strong fund performance remains important.
The rating is dependent upon the company’s ability to sustain its market share and upholding strong investment processes and control environment. Meanwhile, consistent performance of funds compared to benchmark and peers is critical. Any sustained downturn in fund performance will impact the rating.
Al Meezan Investment Management Limited, established in 1995, is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory business. The company changed its status to a public unlisted company from private Limited in 2001. Al Meezan is the only asset management company in the country that is fully Shariah compliant without any conventional fund. Meezan Bank Limited is the largest shareholder of Al Meezan with a stake of 65%, followed by Pakistan Kuwait Investment Company (~30%). The CEO, Mr. Mohammad Shoaib, also holds ~4.85% stake in the company. Mr. Mohammad Shoaib, CFA, has over 28 years of experience in managing investment portfolios. The company’s ten-member board comprises the CEO, four representatives of Meezan Bank, two representatives of Pak Kuwait Investment Company and three independent directors.