PACRA Maintains Stability Rating of 786 Smart Fund

786 Smart Fund (or the "Fund") is an open ended shariah compliant income category Fund which reflects the medium risk profile. The objective of the Fund is to provide competitive risk adjusted returns to its investors by investing in a diversified portfolio of long, medium and short term Shariah compliant debt instruments while taking in to account liquidity considerations. The assigned rating reflects the Fund's moderate credit and interest rate risk profile emanating from its investment strategy. The Fund had allocated ~71.6% in corporate sukuks rated single A+ and above, ~18.5% in Islamic commercial papers rated double AA whereas ~6.3% in bank placements majority in double AA rated bank and ~3.5% in other receivables at the end Dec’22. The duration and the WAM of the Fund stood at 100 days at end Dec’22, exposing high interest rate and credit risk. The credit risk high due to investment in corporate sukuks. The unit holding pattern of top 10 investors concentration of the Fund, at Dec’22 was ~90.5% of which ~72.1% were related parties investments, keeping redemption pressure to low level.
Going forward, any material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
786 Investments Limited is a public listed company and was founded in 1990 with Asian Development Bank being its co-sponsor. The Company commenced business operations of venture capital financing in 1993. Later, in 2002, First Dawood Group in partnership with Asian Development Bank, converted the Company's business operations to asset management. The key shareholders are First Dawood Investment Bank (15%), Bank of Khyber (15%), B.R.R. Guardian Modaraba (~13%), and Miss Tara Uzra Dawood (~12%). The remaining shareholding of ~45% is held by other individuals and entities. 786IL has merged First Dawood Mutual Fund and 786 Rising Star Fund with and into 786 Smart Fund. The Company had AUM's of ~ PKR 582mln at end Dec'22
786 Investments Limited has a seven member board including the CEO, Ms. Tara Uzra Dawood. She holds a Doctorate in judicial science from Harvard Law School. She has around two decades of professional experience in mergers and acquisitions, corporate law and investment management. She is supported by an experienced core management team. The other board members comprise four independent directors including Mr. Ahmed Salman Munir, who is also also the Chairperson of the board. He has more than 30 years of progressive experience working with Fortune many companies both inside and outside Pakistan.