The Pakistan Credit Rating Agency Limited
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Muhammad Azmat Shaheen

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PACRA Assigns Positive Outlook to Asset Manager Rating of AWT Investment Limited

Rating Type Asset Manager
(05-Aug-22 )
(05-Aug-21 )
Action Maintain Initial
AM Rating AM3++ AM3++
Outlook Positive Stable
Rating Watch - -

The assigned rating reflects the modest positioning of AWT Investments Limited ("AWTIL" or the "Company"). The prominent business acumen of the sponsor bodes well for the rating. The rating is supported by a structured investment process, sound governance structure, and proficient and qualified management. The Company is also strengthening its footprints in the competitive investment advisory domain. The market share of the Company remained stagnant with an average market share 0.2% during FY22. However, the AUMs of the Company have shown an increase of 27% since Dec'21. The retail clientele under the SMA portfolio constitutes 68% reflecting granularity. The association of SMA spans an average from 1 year to 3 years, while the portfolio mainly comprises discretionary SMAs. Recently, Mr. Sajjad Anwar joined AWT Investment Limited in replacement of Mr. Salman (Ex. CEO). The Company has implemented enhanced version of Asset Connect (Java based) for Mutual fund segment. Moreover, the process is well underway for implementation of a customized Software solution for the Investment Advisory business. The technological developments will strengthen the footprints of the Company in a fast-moving era. In reference to the organization structure: Qualified and experienced professionals have been hired for the positions of Company Secretary, CFO, head of Internal Audit, and head of Risk Management. The process for hiring in the Fund Management department for various positions is in the final stage. The Investment Advisory department has been revamped with strengthening of human resource, streamlining of SOPs, and upgradation of IT systems.

On the financial side, management fees and advisory fees are on a declining trend making investment income of PKR 41mln during 1HFY22 (1HFY21: PKR 58mln) and net loss after tax of PKR 37mln (1HFY21: Profit of PKR 34mln). The major reason for the net loss is the unrealized losses in investments. Furthermore, the advisory fee has also declined on the back of weak stock market performance which has impacted the performance fee. The Company's equity stood at PKR 230.58mln at end Dec’21 which is meeting the minimum equity requirement of PKR 230mln.
The rating is dependent on the Company’s ability to strengthen its market position. At the same time, stability in key human resource, structured improvement in risk management framework and success of initiatives to increase retail AUM will remain crucial for the rating. Diversification in AUM base among various fund categories along with improvements in the overall operating platform will bode well for the Company.

About the Entity
AWT Investments Limited (formerly Primus Investment Management Limited) is a public unlisted company incorporated in August 2011. The Company is registered as an Asset Management Company and Investment adviser under the Non-Banking Finance Companies Regulations by the Securities and Exchange Commission of Pakistan (SECP). Head office of the company is situated in Rawalpindi. The Company’s board of directors comprises six members including the Chairman and the Chief Executive Officer. At FY22, AWTIL is offering five funds in Money Market, Equity and Income categories with conglomerate AUMs of PKR 2.3bln.
Mr. Sajjad Anwar joined AWTIL in Apr'22. He is a seasoned Investment Professional with wide-ranging experience in the Financial Markets of Pakistan spanning over 21 years that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 15 years, he has been working in the Fund Management Industry.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.