PACRA Maintains Asset Manager Rating of MCB-Arif Habib Savings and Investments Limited
|Rating Type||Asset Manager|
The rating reflects the Company's positioning as one of the leading players in the AMC industry, supported by a strong control environment, structured Investment processes, good governance framework, and qualified management team. The assigned rating takes into account improvement across key performance areas including investment management, fund performance, control framework, and growth & diversity in assets under management. The rating reflects the sizable growth in the AUMs of the Company, which have increased by ~48% at the end Jun'21 on a YoY basis. While the market shared showed an increase of ~1% and is currently standing at ~9.3%. The growth momentum is expected to continue with management focusing on strengthening its digital presence and outreach. The Company is also managing one of the largest AUMs portfolios under the SMA segment and holds a significant share of the investment advisory domain. The Company has segregated its Compliance and Risk Management function in line with the best practices to strengthen its control environment. The Company has a large retail customer base with improving granularity resulting in sticky AUMs. With a comprehensive portfolio of fifteen open-end mutual funds and two voluntary pension schemes, the Company offers a wide range of products for its customers. The Company’s association with MCB Bank Limited – one of the largest commercial banks – and ensuing synergies have supplemented growth. The funds under management have shown consistent and good long term performance compared to peers.. The profitability of the Company has improved notably in FY21 on the back of improving revenue generation ability from the collective investment schemes and the SMA portfolio. The Company enjoys sound liquidity and has sufficient lines available if the need arises. The equity base of the company is well above the minimum regulatory requirement and stood at ~PKR 1.6bln as at end-Jun'21.
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 and/or significant loss in market share will impact the rating
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, to achieve synergies in asset management business and access to a wider distribution network. Pursuant to the merger, the name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 98bln at end-Jun'21 (Jun'20: ~PKR 66bln).