Profile
Structure
JS Investments Limited (“JSIL” or the “Company”) is a publicly listed company in Pakistan, incorporated in1995, under the Companies Act, 2017. Licensed under NBFC Rules, 2003, and NBFC Regulations, 2008, JSIL operates as an asset manager, investment advisor, and Pension Fund Manager under the Voluntary Pension System Rules, 2005. It has also obtained licenses for private equity, venture capital, and REIT management from SECP.
Background
JSIL was founded by INVESCO PLC, Europe’s largest investment manager, and IFC, the World Bank Group's private sector arm.
Operations
JS Investments Limited offers diverse investment products, including mutual funds, pension schemes, SMAs, REITs, and private equity funds, for individual and institutional investors.
Ownership
Ownership Structure
JSIL is a subsidiary of JS Bank Limited, which holds an 84.56% stake, while the remaining 15.44% is owned by financial institutions and the general public.
Stability
Building on years of experience in capital market, equity brokerage, financial and banking services etc.
Business Acumen
JS Bank Limited, a subsidiary of Jahangir Siddiqui & Co. Limited (JSCL). JSCL serves as the holding company for JS Group, which is primarily focused on financial services, including asset management, securities and commodities brokerage, commercial banking, and insurance, alongside other diversified activities.
Financial Strength
JS Bank Limited has an unconsolidated asset base of PKR 680bln at end-Sep’24 accompanied by the equity of PKR 43.4bln. The long-term credit rating of JS Bank is ‘AA ‘and the short-term rating is ‘A1+’.
Governance
Board Structure
JSIL's control rests with an eight-member board of directors, including the CEO. The Board comprises three independent directors, with all others, except the CEO, being non-executive.
Members’ Profile
The Chairperson, Mr. Suleman Lalani, also serves as group president of JSCL. A Fellow of the Institute of Chartered Accountants of Pakistan, he has 25 years of financial services experience. Previously, he was Executive Director of Finance & Operations, Company Secretary, and CFO at JS Investments Limited for seven years. The Board brings an average of 30 years of diversified experience across banking, finance, investments, microfinance, acquisitions, restructuring, international marketing, economics, and technology, with members possessing strong profiles and industry-relevant expertise.
Board Effectiveness
To maintain an effective control environment and ensure compliance with reporting standards, JSIL has established an Audit Committee, HR Committee, and Executive Risk Management Committee at the Board level. These committees operate under Board-approved Terms of Reference (TORs).
Financial Transparency
JSIL has outsourced its internal audit function to M/S BDO Ebrahim & Co. for effective control monitoring. The external auditors, M/S KPMG Taseer Hadi & Co., hold a satisfactory QCR rating and are classified in the 'A' category on the SBP Panel of Auditors. They issued an unmodified review report for the year ended Dec'2023.
Management
Organizational Structure
JSIL has a well-defined organizational structure based on eight departments, i) HR and Administration, ii) Compliance and Risk Management, iii) Business Development, iv) Investments and Research, v) Information Technology, vi) Finance, vii) Internal Audit and viii) Operations.
Management Team
JSIL's management team, led by CEO Ms. Iffat Zehra Mankani since April 2021, brings over 20 years of experience across public and private markets. She previously served at PwC Canada’s Deals Advisory team, specializing in financial instruments and private debt valuations. The team’s expertise spans financial management, internal controls, corporate governance, capital markets, investment management, equity advisory, and private banking.
Effectiveness
JSIL has established 3 management committees. These committees along with clearly defined roles and responsibilities within the organizational structure enhance efficiency of operational decision making by bridging inter-departmental gaps and ensure alignment with strategic objectives.
MIS
JSIL utilizes a Unit Management System and ERP Application by Softech Systems Private Limited. The management has established a four member IT Steering Committee to address IT matters efficiently. The Company is focused on strengthening its technological platform to enhance outreach and customer service.
Risk Management framework
The compliance and risk management department ensures adherence to statutory regulations and internal guidelines. Segregating functions to minimize overlaps aligns with best practices and strengthens controls. KYC/AML practices are strictly monitored.
Business Risk
Industry Dynamics
The business environment in the country remained challenging, and measures taken by the Government towards economic stabilization have impacted overall business sentiments. Investment finance companies continue to face stiff competition from banks. However, there exists a vacuum in the SME financing market. An estimated 5.2mln SMEs are operating across the country in the formal and informal sector comprising about 90% of the exclusive private businesses. The sector provides employment to 30% of the workforce and contributes ~40% to the annual GDP. As of Dec-23, outstanding loans to the SMEs were recorded at PKR 542.5bln extended to ~172,300 active borrowers.
Relative Position
JSIL is aggressively working to strengthen its penetration in the industry. Currently, the market share of the Company stood at ~3% as of the end of Sep'2024.
Revenues
As of Dec'2023, the Company earned a management fee of PKR 258mln from the collective investment scheme (CIS) including PKR 7.9mln from Rental REIT Fund (Dec'2022: PKR 173mln). Whereas, the Company earned a fee of PKR 0.6mln from SMA portfolio. During 9MCY24, the Company reported a 100% increase in management fee from CIS, reaching PKR 343mln (9MCY23: PKR 171mln) and PKR 0.17mln from SMA portfolio.
Performance
The AUMs at end-Nov'2024 amounted to ~PKR 101bln with a market share of ~3%. In the trailing 12 months ending Sep'2024, the majority of the funds ranked in the top quartile, with equity category performance aligning with industry trends. Whereas, the Company’s PAT grew and was recorded at PKR 256mln at the end of 9MCY24 (9MCY23: PKR 117mln) supported by higher management fee, realized/unrealized investment gains, and dividend income. Achieving competitive investment results to sustain and improve funds performance is the principal objective of an JSIL and would remain imperative for the rating. In long run, the funds of an JSIL with noted strengths will usually be superior or at par with peers sustaining adequate earnings.
Sustainability
JSIL depicts sustainable business to keep the asset quality intact. JSIL manages a diverse portfolio of funds across Conventional and Shariah-compliant categories, voluntary pension schemes, Exchange Traded Fund, and REIT Scheme.
Financial Risk
Credit Risk
Policies, risk budgets, and limits are well-defined across all funds.
Market Risk
For managing market risk, various techniques such as VaR analysis, beta analysis, and stress testing are being used. The exposure limits applicable to interest-bearing securities are regularly reviewed and reported to the management.
Liquidity and Funding
The department ensures sufficient liquidity by investing in liquid avenues. Internally designed methods are used to classify stocks into liquid/semiliquid/IL-liquid categories.
Capitalization
The equity of the JSIL stood at PKR 1,665mln as of Dec’23 (Dec’22: PKR 1,355mln). Whereas, the equity of the Company stood at PKR 1,921mln as of Sep’24.
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