Muhammad Zain Ayaz
PACRA Maintains Asset Manager Rating of Alfalah GHP Investment Management Limited
|Rating Type||Asset Manager|
The rating reflects the Company’s prominent position in the domestic AMC industry, supported by a structured investment process, sound governance structure, proficient and qualified management, and diversified product slate. The Company has also established its presence in the competitive investment advisory domain, supplementing its revenues. Since Jun'20, the Company's AUMs grew by ~25% stood at ~PKR 50bln at end Dec'20 (Jun’20: ~PKR 40bln). However, the market share stood constant as the industry grew at a faster pace with strong competition. In order to further improve its market share, the management is focusing on strengthening its digital platform for better retail penetration, enhanced customer services and to create synergies with the parent bank. Timely materialization of these initiatives is important. The Company’s product slate is tilted towards fixed income/money market funds. The fund performance remained volatile, as most of the funds remain below their respective benchmarks, particularly funds from equity and islamic equity category. The Company reported a profit after tax of ~PKR 128 mln for the 1QFY21 (SPLY: ~PKR 91mln). The equity stood at ~PKR 1.1bln at end Sep'20, which is well above the minimum capital requirement. The rating incorporates the Company's association with Bank Alfalah Limited and potential synergies due to established presence of sponsor banks branch network.
The rating is dependent on the Company’s ability to strengthen its market position along with its peers while sustaining superior fund performance. At the same time, stability in key human resource, structured improvement in risk management framework and success of initiatives to increase retail AUM will remain crucial for the rating.
Alfalah GHP Investment Management Limited was incorporated on October 18, 2004 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to manage open-ended mutual funds and offer investment advisory services. The Company was established as joint venture Non-Banking Finance Company by Bank Alfalah Limited and GHP Arbitrium. The Company provides a wide range of mutual funds and pension funds both in conventional and Shariah compliant category. The Company also provides investment advisory services to the Company’s board of directors comprises eight members including the Chairman and the Chief Executive Officer. The board is dominated by representatives of MAB Investments and Bank Alfalah Limited. The board has two independent and five non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 50bln at end Dec’20 and are spread across fourteen open-end mutual funds and two voluntary pension schemes.