The Pakistan Credit Rating Agency Limited
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Afnan Iqbal

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PACRA Maintains Asset Manager Rating of Alfalah GHP Investment Management Limited, Outlook "Positive"

Rating Type Asset Manager
Action Maintain Maintain
AM Rating AM2+ AM2+
Outlook Positive Positive
Rating Watch - -

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. The Company has entered into partnership arrangements with AZIMUT and launched an oversees fund to bolster its position. The AUMs of the Company decreased slightly to stand at ~PKR 40,079mln at end Jun’20 (Dec’19: ~PKR 41,973mln). The market share witnessed a decline of 1% as the industry grew at a faster pace with strong competition. However, the Company has recorded growth in July and the management intends 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 overall fund performance remained satisfactory with majority funds (mainly Money Market and Fixed Income) outperforming industry average and benchmark with exception of Equity Funds. The Company remained profitable during CY19 with robust capitalization. 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.

About the Entity
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 HNW individuals and corporate clients.

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 40,079mln at end Jun’20 and are spread across fourteen open-end mutual funds and two voluntary pension schemes.

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.