PACRA maintains Asset Manager Rating of AKD Investment Management Limited

The assigned rating incorporates AKD Investment Management Limited's ("AKDIML" or the "Company") adequate corporate governance structure and experienced management team. AKDIML is managing an adequate fund slate comprising equity, income, index tracker and money market categories, however, the equity category has a major proportion of total AUMs; on average ~30.9% as of Mar'24. The Company is following a risk-aggressive approach to generate returns. The average market share of the Company fluctuated between 0.3% and 0.4%, during 9MFY24. The Company has strategized to improve its market share by 1) strengthening retail penetration, 2) improving its technological platform, and 3) launching new products. The AMC uses in-house MIS called FundXs, for NAV calculation. At end-Mar'24, the trailing 12-month return showed that the funds' performance in income and money market categories remained above market averages whereas the equity funds remained in line with the peers. Furthermore, in terms of the Performance Ranking of Apr'23, the AKD Cash Fund and AKD Islamic Income Fund of the Company have secured top quartiles, thus supporting the efficacy and proficiency of their research function. The Company is also managing investment advisory portfolios and generating advisory fees which provides strength to the core income. In comparison with 9MFY24, the management fee has decreased by~11.5% and reached PKR ~58.8mln (9MFY23: PKR 65.6mln). However, the Company was able to maintain its profitability due to unrealized gain on investments and a decline in operating expenses. The equity of the Company on the end of Mar'24 stood at PKR ~274mln (Dec'23: PKR 289mln), which is above the minimum capital requirement. Going forward, further diversification in the AUM base among various fund categories along with improvements in the overall operating platform will bode well for the Company.
Augmentation in equity base which currently is close to regulatory requirements would stand imperative to the assigned rating. The positive outlook signifies income fund's performance and capable research team. The Company’s ability to successfully execute its business strategy and optimal utilization of its resources and materialization of initiatives into improved market share would remain imperative.

About the Entity
AKDIML commenced its operations in September 2004 and is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited (Formerly: Aqeel Karim Dhedhi Securities (Private) Limited). The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing eight open-end funds with assets under management of ~PKR 7.3bln at end Mar'24.