The Pakistan Credit Rating Agency Limited
09-Sep-21
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 Income Fund
| Rating Type | Stability Rating | |
|
Current (09-Sep-21 ) |
Previous (09-Mar-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Lakson Income Fund (or the 'Fund') is a medium-risk profile fund. The assigned rating reflects the strong strength of the Fund's credit and interest rate risk profile. At end-Jun'21, ~54% of Funds were deposited with AA+ or above rated banks. While 17% of the Fund's assets remained invested in government securities. Whereas, the Fund also had an exposure of ~11% in TFCs, and commercial papers, primarily rated 'A+' and above. The Fund's average duration was less than 45 days as of June 21, reducing the Fund's exposure to the interest rate risk. According to the investment policy, at least 25% of the net assets shall be invested in cash and near cash instruments. The Fund is in compliance with the investment policy. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~71% of the fund's assets, which may expose the Fund to redemption pressure, however the liquid nature of the fund's portfolio reduces this risk.
Going forward, based on market expectations the Fund may increase its exposure in floating rate instruments and short tenor instruments as the central bank is expected to smoothly increase the policy rate. 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.
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 22,714mln at end- Jun'21.