PACRA Maintains Asset Manager Rating of 786 Investments Limited

Lahore, December 28, 2020 (PPI-OT): The rating reflects the Company’s (“786IL”or the “Company”) modest positioning in the competitive asset management industry. The Company is focusing on managing only one fund i.e. 786 Smart Fund. Since Dec’19, the assets under management of the Company increased by ~9%, to PKR ~603mln at end Sep’20. The rating also incorporates the Company’s good governance framework, experienced management team and adequate organizational structure.

During the unprecedented situations amid COVID-19 pandemic, the Company managed to improve the financial position and turned the losses into profits. The Company recorded a profit of PKR 2.82mln during FY20 (FY19: Loss PKR 43.2mln). Other Income and share of associates’ also contributed to turning around the Company’s losses into profits.

786IL is also in the process of obtaining license of investment advisory services, which would ultimately strengthen the existing revenue streams. The fund performance remained strong with 786 Smart Fund outperforming the peers in the category. The Company has limited fund size. Losses in previous periods eroded its equity, although it meets the minimum regulatory requirement. Currently, the equity stood at PKR 230mln at end Sep’20. Strong sponsor commitment is considered positive for the rating.

The rating is dependent on materialization of strategy to enhance AUM’s and market position of the Company. Meanwhile, maintaining strong fund performance and diversifying fund slate is important. Upholding high governance standards and strengthening of risk management is crucial for the rating.

For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425

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