The Pakistan Credit Rating Agency Limited
08-Feb-21
Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Asset Manager Rating of AKD Investment Management Limited
| Rating Type | Asset Manager | |
|
Current (08-Feb-21 ) |
Previous (08-Feb-20 ) |
|
| Action | Maintain | Maintain |
| AM Rating | AM3++ | AM3++ |
| Outlook | Stable | Negative |
| Rating Watch | - | - |
The rating incorporates AKD Investment Management Limited's ("AKDIML" or the "Company") adequate corporate governance structure, experienced management team and recognized name in Pakistan capital market. Since Dec'19, the AUMs of the Company grew by ~20% and currently stood at PKR ~6.528mln. However, the rating is constrained by relatively small market share (<1%) and high concentration in investor base. The Company has a stable core management team, which provides support to the rating. The funds' performance remained above par, equity funds performed well above benchmark and industry average. Whereas, Income and Money market fund's performance remained in line with industry averages. Diversification in AUM base among various fund categories along with improvements in the overall operating platform will bode well for the Company. The profitability of the Company is improving majorly on the back of unrealized gains on investments. The equity of the Company which has come under pressure due to losses is now recovered on the back of improving profits.
The rating is dependent on sustainable cash flows and profits which would ultimately results in stable equity. The Company’s ability to successfully execute its business strategy and optimal utilization of its resources and group name remains imperative. Meanwhile, improving market share, maintaining strong fund performance, strengthening of core process and meeting the regulatory thresholds is critical.
About
the Entity
AKD Investment Management Limited commenced its operations in September 2004. The Company is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited (Formerly: Aqeel Karim Dhedhi Securities (Private) Limited).
The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing seven open-end funds with assets under management of ~PKR 6.528bln at end Dec-20