PACRA Assigns Initial Rating of Pak Qatar Asset Management Company Limited

Pak Qatar Asset Management Limited ("PQAMCL" or the "AMC") is part of Pak Qatar Group which is the pioneer and the largest Takaful Group. The prominent business acumen of the sponsor bodes well for the rating. In Sep’21, the AMC has initiated its operation in the investment advisory sector as well as asset management sector. The Company ingeniously identified market niche while enabling potential investors to maximize return on investments. PQAMC stands apart amongst the peers with a unique product suite complemented by a versatile Shairah structure. As of end of Sep'23 the asset under management of the Company stood at PKR ~15.7bln and at the end of Jun PKR ~11.1bln (Dec’22: PKR 5.3bln) with a current market share of ~1%. This represents the strengthening position of the AMC amongst the peer group. The Company has launched four open-ended funds as part of its diversified product portfolio among these offerings, the Pak Qatar Islamic Income Fund holds a prominent position within the Shariah-compliant income category, currently representing ~48.45% of the total weightage in the company's investment offerings. Additionally, the Pak Qatar Islamic Cash Fund, comprising three distinct plans. Meanwhile, the third fund in the portfolio, the Pak Qatar Islamic Stock Fund, operates within the Islamic Equity category. The Company had recently introduced Asset Allocation Fund under plan structure and is working on launch of additional plans that falls under the category of Shariah Asset Allocation. Since the launch of the Funds in Oct'22, the Fund performance of the AMC remained above the industry average. The AMC is also managing a Separately Managed Account (SMA) discretionary portfolio having a market share of ~5% (as of end Jun'23) in the advisory domain with a total industry size of ~477bln. On the marketing side, the AMC has been focusing on retail penetration through the PQFTL distribution channel which has more than 100 branches in major cities across Pakistan. The AMC is further in process to establish its distribution channels with leading commercial banks which will continue to support the growth in the retail segment.
On the financial side, the AMC experienced positive growth during the period under review. During FY23, the Company's topline significantly increased to PKR 105mln (FY22: PKR 44mln). Moreover, the net profit during FY23 increased by ~61.6% to PKR 47mln (FY23: PKR 31mln). The Company's equity stood at PKR 522mln at the end Sep'23, comfortably exceeding the regulatory requirement.
The rating is dependent upon the Company's ability to sustain its market share and uphold strong investment processes. A sustained upward trend in fund performance along with consistent increase in market share will continue to have visible affirmation in the rating.

About the Entity
Pak Qatar Asset Management Limited, established in 2021, is licensed by the SECP to carry out asset management and investment advisory business. The major shareholder of the Company is the holding company Pak Qatar Investment (PVT) LTD which holds 52% of stake and remaining shareholder include FWU AG (20%), and Pak Qatar Family Takaful (5%). However, two board directors Mr. Owais Ansari and Mr. Kamran Saleem also hold 14% and 7%. The Company's board is composed of five members, with representation of two members from Pak Qatar Investment Limited, one representative of Pak Qatar Family Takaful Limited, one representative of FWU AG and one independent director. The AUMs of the Company stood at PKR 15.7bln at the end Sep’23.