Muhammad Azmat Shaheen
PACRA Maintains Asset Manager Rating of NBP Fund Management Limited
|Rating Type||Asset Manager|
The rating reflects the NBP Fund Management Limited's ("NBP Fund" or the "Company") dominant market position as one of the leading players in the asset management industry. The rating takes comfort from stable & professional management team, well defined investment process, well-developed risk management function, and strong brand name. The AMC has one of the biggest sales infrastructure, aggressive sales strategy is in place which has strengthened the sales force and contributed towards enhanced retail clientele and geographic expansion. Since Jun'21, the AUMs base of the Company meagerly grew by ~1% (as on Mar’22) as the Company focused on money market and fixed income categories. However, the market share fell to 14.9% at end Mar'22 (FY21: 15.9%) whereby the market grew on a faster pace by ~7.6%. The large retail customer base of the Company, having granularity, provides support to the AUMs base. The Company boasts with 207,648 retail clients as at Mar'22 which is the highest number in market. During 9MFY22, the fund performance has remained above par with majority of the Funds beat the industry averages except equity category fund's which remained in line with market performance and could not generate the expected returns. The capitalization and fee generation capabilities provide cushion against market volatility. The Company remained profitable during 9MFY22 with PKR 198mln while the equity base of the Company reported at PKR 1,325mln. The rating incorporates the Company's association with a renowned bank - National Bank of Pakistan - and potential synergies.
The rating is dependent on the management’s ability to sustain its market share. Upholding strong organization structure and controls along with retention of key personnel is imperative. Consistent superior fund performance remains imperative for the rating.
NBP Fund Management Limited, established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. Baltoro Growth Fund acquired the entire 36% stake of Alexandra Fund Management Private Limited in the company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro has made three investments in the pharmaceutical, renewable energy and financial services sectors. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed holds a 10% stake in the Company. The Company’s nine-member Board of Directors includes three independent directors, five non-executive directors and the CEO. The Company is currently managing a diversified fund slate of thirty-four under twelve different categories, two voluntary pension schemes, one dedicated equity fund and one exchange traded fund.