PACRA Maintains Asset Manager Rating of Al Meezan Investment Management Limited

Al Meezan Investment Management Limited’s ("Al Meezan" or the "Company") rating reflects the Company’s established standing as the largest asset manager and its competitive advantage as the first and the largest Shariah-Compliant Asset Manager in Pakistan. This rating reflects the Company's strong brand reputation, diversified fund portfolio, robust governance framework, structured investment processes, and qualified management team. The Company has segregated its Compliance and Audit functions to strengthen its control environment. The increased AUM size, the launch of new plans, sponsor support, retail contribution, customer servicing and support, and digital excellence bode well for the assigned rating. Since FY23, the AMC has grown significantly by ~61% in terms of AUMs, while ~55.6% is the contribution from the Meezan Rozana Amdani Fund and Meezan Daily Income Fund under Shariah Compliant Income and Money Market category at the period ended Mar'24. The Company's market share has experienced an increase of ~7% as the market grew at a faster pace of ~49% since FY23. Lately the CEO has resigned and the new appointment has to be made. The sponsor -- Meezan Bank -- has been a key support always and that has been a strong comfort against the ensuing risks. AUM inflows over the period reached ~30% of the total current AUMs enabled by the Bank. However, the Company is catching up with its market share at full tilt and currently standing at 19.6% (FY23: 18.2%). The AMC has penetrated well in the retail market ~70% of the total AUMs mix is from retail, the highest in the industry. Such a high retail mix shows the granularity and stickiness of the AUMs. Al Meezan is managing a diverse fund slate of twenty funds across nine different Shariah-compliant categories, including a voluntary pension scheme and is the only AMC in the industry that is offering commodity-based fund/VPS Plan i.e. Meezan Gold Fund and MTPF-Gold Sub Fund. While Funds falling under Equity category performed in line with industry and stock market performance.
On the financial side, the Company experienced positive growth during the period under review. During 6MFY24, the Company's topline increased by ~87% to PKR 1,552mln (SPLY: PKR 829mln). Moreover, the net profit during 6MFY24 increased by 2.5 times to PKR 1,210mln (SPLY: PKR 343mln) on the back of ~75% rise in management fee and 26 times increase in share of profit from associates. The Company's equity stood at PKR 4,427mln at end 6MFY24, comfortably exceeding the regulatory requirement.
The rating is dependent upon the Company's ability to sustain its market share and uphold strong investment processes. Any sustained downturn in fund performance and/or significant loss in market share will impact the rating.

About the Entity
Al Meezan Investment Management Limited, established in 1995, is licensed by the SECP to carry out asset management and investment advisory business. The Company changed its status to a public unlisted company from private limited in 2001. Meezan Bank Limited is the largest shareholder of the Company with a stake of 65%, followed by Pakistan Kuwait Investment Company Limited with 30% shareholding. The Company's board is composed of ten members including the CEO, with representation of four members from Meezan Bank, two representatives of Pak Kuwait Investment Company Limited and three independent directors. The AUMs of the company crossed milestone of 500bln in May'24 and currently stood at ~538bln as of Jun'24.