The Pakistan Credit Rating Agency Limited
27-Jun-19
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Asset Manager Rating of NBP Fund Management Limited
| Rating Type | Asset Manager | |
|
Current (27-Jun-19 ) |
Previous (28-Dec-18 ) |
|
| Action | Maintain | Maintain |
| AM Rating | AM1 | AM1 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the company's strong position in Pakistan's asset management industry. The company has a seasoned management team, well-developed risk management function, strong brand name, structured investment process, along with and diversified fund slate bodes well for the company in maintaining its competitive positioning. The company has experienced a decline in its AUMs by ~14%, stood at ~PKR 90bln at end Mar-19 as compared to the same period last year. The company has made a sufficient net profit for 9MFY19. The rating incorporates from the company's association with the National Bank of Pakistan and is expected to supplement its retail penetration which will diversify the AUMs base and strengthen its standing amongst peers. The change in the ownership, Baltoro Growth Fund, taking up (36%) stake in NBP Fund Management Limited from Alexandra Fund Management Pte. Ltd. is expected to further enhance governance and transparency through higher engagement of Baltoro Growth Fund.
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The rating is dependent on the management’s ability to hold its strong position in the industry. Upholding strong organization structure along with retention of key personnel and consistent superior fund performance remains imperative for the rating.
About
the Entity
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%. During the year, Baltoro Growth Fund acquired the entire 36% stake of Alexandra Fund Management Pte. Ltd. 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, also holds a 10% stake in the company.
The company’s nine-member Board of Directors include three independent directors and the CEO. During FY19, there has been four new induction in the Board of Directors. The company is currently managing a diversified fund slate of twenty-six funds.