Muhammad Zain Ayaz
PACRA Maintains Stability Rating of 786 Smart Fund (Formerly: Dawood Income Fund)
|Rating Type||Stability Rating|
The Fund's strong credit quality and sound liquidity profile emanates primarily from its mandate to invest in low duration avenues such as cash placements in banks and ensuring low exposure to interest rate risk. At end Dec'20, ~85% of Fund's assets allocated to bank placements rated ‘A and above’, whereas ~14% to Sukuk/TFCs rated ‘A+ and above’ and above. Fund's unit holding pattern is moderately concentrated with top 10 investors representing ~83% of the net assets, ~28% of which are related parties, which keeps the redemption pressure to moderate level. Average duration of the Fund remained within 30 days and all investments were socially responsible.
Going forward, the Fund's management intends to maintain its current exposure in bank placements and sukuk/TFCs. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
786 Investments Limited is a public listed company and was founded in 1990 with Asian Development Bank being its co-sponsor. The Company commenced business operations of venture capital financing in 1993. Later, in 2002, First Dawood Group in partnership with Asian Development Bank, converted the Company's business operations to asset management. The key shareholders are First Dawood Investment Bank (15%), Bank of Khyber (15%), B.R.R. Guardian Modaraba (~13%), and Miss Tara Uzra Dawood (~12%). The remaining shareholding of ~45% is held by other individuals and entities. 786IL has merged First Dawood Mutual Fund and 786 Rising Star Fund with and into 786 Smart Fund. The Company had AUM's of ~ PKR 555 mln at end Sep'20 (Dec'19: ~PKR 550 mln).
786 Investments Limited has a seven member board including the CEO, Ms. Tara Uzra Dawood. She holds a Doctorate in judicial science from Harvard Law School. She is on the board of directors of MUFAP and has around two decades of professional experience in mergers and acquisitions, corporate law and investment management. She is supported by an experienced core management team. The other board members comprise four independent directors including Mrs. Shafqat Sultana, who is also also the Chairperson of the board. She is a professional banker and possesses around four decades of experience in financial sector.