The Pakistan Credit Rating Agency Limited
09-Mar-22
Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of Lakson Money Market Fund
| Rating Type | Stability Rating | |
|
Current (09-Mar-22 ) |
Previous (09-Sep-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Lakson Money Market Fund (or the 'Fund') is a low-risk profile Fund. The Fund's rating reflects the very strong credit quality, robust liquidity, and low exposure to interest rate volatility. According to rating criteria, the Fund shall invest 50% of its net assets in 'AAA' rated avenues to maintain its assigned rating. At end-Dec'21, ~98% of the Fund's assets were deposited with banks rated 'AA+' and above. Out of total bank allocations, 70% of net assets are placed in a single bank giving rise to concentration risk. The WAM of the Fund was reported at 2 days and the duration was recorded at 4 days at end-Dec'21. Both measures are in line with rating criteria for money market funds. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~78% of the net assets; however, due to the highly liquid nature of the Fund's assets, the Fund has an adequate ability to meet redemption pressure.
Going forward, following the investment policy and market expectations, the Fund will be maintaining its exposure in 'AA+' and higher-rated investment avenues. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
About
the Entity
Lakson Investments Limited, the investment management company of the Lakson Group, was incorporated on January 02, 2009, as an unlisted public company. It is licensed to undertake Asset Management, Investment Advisory and Private Fund Management services. Lakson Investments is the only AMC, which offers exposure to international markets through Lakson Asset Allocation Developed Markets Fund. The Company is also managing a private equity and venture capital fund along with mutual funds and SMA products. Mr. Babar Ali Lakhani, CEO of the company, over 19 years of investment and portfolio management experience in domestic and international equity and fixed income markets.
The company’s control vests in a seven-member board, comprising four non-executives, one executive, and three independent directors. The Chairman of the Lakson Group, Mr. Iqbal Ali Lakhani, is the chairman of Lakson Investment’s board. The Company is managing six open-end funds under five different categories with an aggregate AUM base of ~PKR 19,923mln at end- Dec'21.