AKD’s AUM declines by 6% due to high reliance on equity funds: PACRA

February 11, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained Asset Manager rating of AKD Investment Management Limited at ‘AM3++’, with a stable outlook forecast.

According to the rating agency, the rating reflects the company's strong governance profile, experienced and qualified management team, structured investment management framework and improving fund slate.

The rating incorporates the company’s established performance track record in equity category. However, the same needs to be translated in fixed income category.

At end Dec-18, the assets under management declined by approximately 6%, due to high reliance on equity funds.

The rating is constrained by relatively small market share (<1%) and high concentration in investor base. Lately, the profitability of the company has come under pressure on the back of subdued performance of capital markets.

The rating is dependent on materialization of the management’s efforts to increase its market share, while achieving diversity in investor as well as an overall asset base.

The company’s ability to successfully execute its business strategy and optimal utilization of its resources and group name remains imperative.

Meanwhile, sustained fund performance and strengthening of core process is critical.

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