PACRA Downgrades Stability Rating of Faysal Financial Sector Opportunity Fund

Faysal Financial Sector Opportunity Fund ("FFSOF" or the "Fund") is a moderate risk profile fund. The investment objective of the Fund is to provide a competitive rate of return to its investors by investing in money market and debt instruments with major exposure in financial sector instruments. At end Dec'23, the Fund was primarily invested in cash of ~94% rated in A category, ~2% in TFC/Sukuk rated in AA category, while the remaining assets are invested in others. At end Dec'23, the WAM stood at 21 days; limiting the exposure to credit risk. The Duration stood at 2 days; limiting the exposure to interest rate risk. The downgrade of the Fund is a realignment due to the chosen investment strategy of the fund being in line with the rating criteria for A+. The unit holding pattern of the fund with top ten investors representing ~77.35% of the funds assets, which exposes the fund to a very high level of redemption pressure.
Going forward, any material changes in the investment policy and/or compliance with the devised rating criteria for the assigned rating would have an impact on the rating.

About the Entity
Faysal Funds (Faysal Asset Management Limited) is a subsidiary of Faysal Bank Limited (FBL). FBL is holding 99.99% shares of Faysal Funds. Faysal Funds was incorporated in Pakistan under the Companies Ordinance, 1984 on August 6, 2003 as an unlisted public limited company and is licensed by the Securities and Exchange Commission of Pakistan to carry out asset management and investment advisory services.
The Board of Directors of the Company comprises five members, including the Mr. Yousaf Hussain has over 26 years of professional experience, primarily at ABN AMRO Bank where he held multiple senior managerial positions including those within the Corporate / Credit and Transaction Banking functions. He has been with Faysal Bank since August 2008, with a significant contribution to the franchise. Mr. Nadir Rahman is CEO and he has extensive, hands on experience of capital markets in Pakistan and internationally, stretching over 32 years, of which 16 years have been in C level positions, including board level experience with listed, unlisted, and international companies. His core areas of expertise are business development, operations, investment management, M&A and corporate restructuring. He has advised on numerous capital market transactions, including the largest de-listing in Pakistan’s history. The Company is managing a diversified portfolio of funds, with AUMs of ~PKR 133.81bln at the end of Dec'23.