The Pakistan Credit Rating Agency Limited
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Shahzaib Khalid

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PACRA Maintains Asset Manager Rating of 786 Investments Limited

Rating Type Asset Manager
(28-Jun-19 )
(28-Dec-18 )
Action Maintain Maintain
AM Rating AM3 AM3
Outlook Stable Stable
Rating Watch - -

The rating reflects 786 Investment Limited’s modest standing in the competitive asset management industry. The assets under management were ~PKR 697mln mark at end Apr-19 as compared to ~PKR 684mln at end Jun-18, which depicts an increase of ~2%. Meanwhile, the company’s significant administrative and operating expenses and loss on redemption of units have impacted its profitability. The management intends to strengthen its financial performance by increasing its fund management revenue through fresh influx of AUM as well as strengthening investment advisory services. The performance of the funds was comparable to most peers with Dawood Income fund outperforming the income category consistently. The company has reasonably experienced management team and adequate organizational structure. The management is focused to materialize its strategic plans by enhancing its position in the industry coupled with major focus on both retail and institutional clientele.
The rating is dependent on company’s ability to enhance its market position, gain in terms of assets under management, diversification in fund slate and maintaining strong performance of its funds. Meanwhile, upholding high governance standards and strengthening of risk management is crucial for the rating.

About the Entity
786 Investments Limited is a privately owned asset management company and was founded in 1990, Asian Development Bank being its co-sponsor. The company commenced business operations of venture capital financing in 1993. Later, in 2002, First Dawood Group in partnership with Asian Development Bank converted the company's business operations to asset management. The key shareholders are First Dawood Investment Bank (15%), Bank of Khyber (15%), B.R.R. Guardian Modaraba (~13%) and Miss Tara Uzra Dawood (~12%). The remaining shareholding of ~45% is held by other individuals. With an AUM base of ~PKR 697mln at end April-19, 786 Investments is managing three open end funds.

786 Investments has a seven member board including the CEO, Ms Tara Uzra Dawood. She holds a Doctorate in judicial science from Harvard Law School. She is on the board of directors of MUFAP and has around two decades of professional experience in mergers and acquisitions, corporate law and investment management. She is supported by an experienced core management team. The other board members comprise four independent directors including Mrs Shafqat Sulatana, also the chairperson of the board. She is a professional banker and possess around four decades of experience in financial sector.

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.