PACRA Maintains Stability Rating of NBP Income Opportunity Fund
|Rating Type||Stability Rating|
The rating reflects the moderate strength of the fund's credit and interest rate risk profile. The investment objective is to maximum possible preservation of capital via investing primarily in money market & debt securities with good credit rating and liquidity. As per the authorised investment policy, the fund may invest in government securities up-to 75% of the net assets and the policy also dictates a maximum 25% allocation in TDR (with Banks). It is targeted that under usual circumstances the duration of the investment portfolio will normally be less than or equal to 2 years.The performance benchmark of the Fund for the period of return shall be the ‘6-month KIBOR’. At end Dec'20, ~27% of exposure was maintained in TFC/Sukuks and ~48% in cash. The remaining funds are invested in RFS and T-Bills. The unit holding pattern of the fund is moderately concentrated with top ten investors representing ~43% of the fund's assets, which exposes the fund to low level of redemption pressure.
Going forward, in accordance with the investment policy the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
NBP Fund Management Limited (or the "Company"), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR 163,473mln at end-Dec'20, the Company is currently managing a diversified fund slate of twenty eight open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.