PACRA Maintains Asset Manager Rating of MCB Investment Management Limited

MCB Investment Management Limited ("MCB Funds" or the "AMC") is amongst the leading players in the asset management industry, supported by a i) seasoned leadership team, ii) strong management stability with extensive industry experience, and iii) robust governance practices. The assigned rating takes into account enhancement across key performance areas, including investment management, fund performance, and growth & diversity in assets under management. Since FY24, the AUM base of the AMC has witnessed a significant growth of ~75%, reaching PKR 394bln as of FY25 (FY24: PKR 224bln), notably outpacing the industry growth of ~41% during the same period. Consequently, the AMC's market share improved to 10% in FY25 (FY24: 8%). With a portfolio of thirty-three open-end mutual funds, two voluntary pension plans, and two KP employees' pension schemes, the AMC offers its customers a wide range of products. The growth is expected to continue with management focusing on customer service enrichment. The growth has been well-supported by strong demand in Shariah-compliant funds alongside a diversified product portfolio, reflecting the AMC's ability to cater to a broad investor base. The funds have shown consistent and good long-term performance compared to peers. The AMC has maintained a strong focus on enhancing retail penetration, contributing to enhanced stickiness and longevity in its AUM base. The current AUM composition reflects a retail-to-corporate ratio of 37:62, including HNWIs. The AMC has made notable advancements on the digital front to enhance customer convenience and service delivery. In addition to the mobile application, a dedicated WhatsApp bot has been introduced, making client interactions and transactions more seamless and user-friendly. Furthermore, MCB has upgraded its iSaveApp, providing investors with a more reliable and efficient platform for managing their investments, reflecting the AMC's focus on leveraging technology to strengthen customer engagement and operational efficiency. The profitability of the AMC has improved notably in FY25 due to an increase in management fee and share of profit from associates, standing at PKR ~1.75bln (FY24: PKR ~861mln). The equity base of the AMC is well above the minimum regulatory requirement and stood at ~PKR 3.2bln as at the end of FY25 (FY24: PKR 2.0bln). The AMC's association with MCB Bank Limited – one of the largest commercial banks – and ensuing synergies have supplemented growth.
The rating is dependent upon the AMC's ability to sustain its market share and uphold strong investment processes and control environment. Meanwhile, consistent performance of funds compared to the benchmark and peers is critical. Any sustained downturn in fund performance and/or significant loss in market share will impact the rating.

About the Entity
MCB Investment Management Limited (MCB Funds) is a Public Listed Company regulated by SECP. MCB Funds holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. Incorporated in 2000 as Arif Habib Investment, it merged with MCB Asset Management in 2011 to enhance synergies and expand distribution. In April 2023, MCB Bank enhanced its shareholding in MCB Funds to 81.42% by acquiring a 30.09% stake from Arif Habib Corporation, which has now fully exited. Along with MCB Bank, Adamjee Insurance holds 7.6%, while the remaining ~11% is held by the general public. Supported by this strong ownership structure, the Company serves both conventional and Shariah-compliant investors, managing a diverse portfolio of thirty-three open-end funds, two voluntary pension schemes, and two KPK pension schemes. The CEO - Khawaja Khalil Shah has joined the AMC in Nov'23 and has diversified experience in financial markets for over 30 years.