PACRA Maintains Asset Manager Rating of AL Habib Asset Management Limited

The ratings reflect AL Habib Asset Management Limited's ("AHAML" or the "Company") strong AUMs base in the domestic industry, supported by i) structural investment process, ii) sound governance structure and iii) experienced and qualified management. The rating also incorporates the Company's association with a well-established large sized bank which is one of the dominant players in banking sector. Since Jun'22, the overall industry has shown a significant growth by 28.4%, while AHAML in line with the industry has shown growth by ~28.3% maintaining the market share of the company at 4.0% as at end Jun'23 as the market grew on the same pace. The Company follows risk averse approach to generate revenues, tilting the AUMs concentration towards money market funds with accumulative fund size of PKR 50.9bln contributing 79.7% of total AUMs depicting high concentration in a single fund. At the AMC level, the top ten investor concentration is also on the high side. The granularity and stickiness of investor's base would bode well for the rating. The asset manager further diversified its fund slate by introducing plans in conventional and shariah Fixed Rate / Return categories along with a government securities fund in the conventional income category, increasing the total number of open-ended funds to twelve. Most of the funds performed better than the benchmarks and were in line with the industry. The asset manager also synergizes through access to the large branch network of Bank AL Habib and its strong brand name. However, the retail mix is inclusive of HNWIs. Furthermore, the Company also synergizes its research function with the sponsor bank. On the technological side, improvement of investor reporting is achieved through the revamped website and launch of mobile App.
On financial profile, the core income has shown an increase of 109.6% and stood at PKR 98.3mln at end of 1QCY23 (1QCY22: PKR 46.9mln) attributable to management fees from money market categories. The Company reported a net profit of PKR 70.7mln during 1QCY23 (1QCY22: PKR 28.1mln). The Company's equity stood at PKR 1,001mln at end Mar'23 (Dec'22: PKR 931mln & Jun'22: PKR 812mln), comfortably meeting the minimum regulatory capital requirement of PKR capital 230mln.
Going forward, growing AUMs, enhanced and stable market share and augmenting equity through internally generated funds would remain imperative to the assigned rating. Maintaining strong fund performance, strengthening systems and adhering to robust investment process is critical.

About the Entity
AHAML incorporated in September 2005 as an unlisted public company, is one of the growing Asset Management and Investment Advisory Company in Pakistan and is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out services under the Non-Banking Finance Companies Regulations. The Company is a wholly owned subsidiary of Bank AL Habib Limited.
The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 21 years in the field of Investments and Fund Management. The Company’s diverse product slate includes seven conventional and five shariah compliant funds in open end schemes along with three voluntary pension schemes in both conventional and shariah categories.