Muhammad Zain Ayaz
PACRA Maintains Asset Manager Rating of First Capital Investments Limited
|Rating Type||Asset Manager|
The rating reflects the Company's modest market share, adequate organizational structure and limited fund slate comprising a single fund. The Company has a stable core management team, which provides support to the rating. Since Dec'20, the Company's AUMs have witnessed a declining trend of 14% and stood at PKR 110mln at end Dec'21. The Fund's performance remained subdued based on 12 months' rolling returns. The rating is constrained by a relatively small market share (<1%) and a high concentration in investor base. Top 10 investors constitute ~91% of total AUMs. The related party concentration is ~75% of the total investors, reducing the redemption pressure. The Company has reported a net loss of PKR ~14mln for Dec’21 (Dec'20: Profit of ~PKR 15mln). This is due to loss incurred by Company's investment in their own equity fund. The equity of the Company is continuously eroding due to losses in short-term investment in its own equity fund and currently standing at PKR ~202mln at the end Dec'21. Going forward, the Company has also plans for expansion of revenue streams.
The rating is dependent on sustainable cash flows and profits which would ultimately results in stable equity. The Company’s ability to successfully execute its business strategy and achieve optimal utilization of its resources while leveraging group synergies remains imperative. Meanwhile, improving market share, maintaining strong fund performance, strengthening of core process and meeting the regulatory thresholds is critical.
First Capital Investments Limited or the 'Company' or 'FCIL' was registered as a Private Limited by shares, incorporated under the Companies Act, 2017 ("the Act"), on October 27, 1994. FCIL has commenced operations in 1995. The Company is sponsored by First Capital Securities Corporation Limited (FCSC) the holding company of First Capital group with 78.85% shareholding. Mr. Sulaiman Ahmed Said AlHoqani - An Omani Investor - holds a strategic stake of 9.2% in FCIL and major shareholding in FCSC. FCIL is currently managing one open-end, equity fund namely First Capital Mutual Fund (FCMF) with assets under management of PKR 129mln at end Dec'20. The Board of Directors comprises four members, including the CEO Mr. Imran Hafeez. The remaining three members including the chairman, are non-executive, and heads the Investment, HR and Audit Committees.