The Pakistan Credit Rating Agency Limited
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Muhammad Azmat Shaheen

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PACRA Maintains Asset Manager Rating of Atlas Asset Management Limited

Rating Type Asset Manager
(23-Dec-22 )
(24-Dec-21 )
Action Maintain Maintain
AM Rating AM2+ AM2+
Outlook Stable Stable
Rating Watch - -

The rating incorporates Atlas Asset Management Limited's ("AAML" or the "Company") market share, experienced management team, structured investment decision process and adequate risk management framework. Strong ownership and good governance profile bodes well to the rating. Since Sep'21, the overall AUMs of the Company decreased by 14.0% and stood at PKR 44.3bln at end Sep'22, which is translated into decrease in overall market share. The company's retail avenue has been gradually increasing and further intends to strengthen its sales team to provide impetus in augmenting retail penetration. To augment its revenue stream, the Company is also offering specialized investment products which includes Separately Managed Accounts with adequate AUMs growth as of end-Sep'22. The overall fund's performance remained above par with majority funds exceeding industry averages during the last 12 months period ended Sep'22. The Money Market Funds and Shariah Compliant Income Fund were able to beat the benchmarks along with peer averages.
The Company remained profitable during FY22 with a dip in profit after tax to stand at PKR 125.3mln (FY21: PKR 169.6mln) mainly due to unrealized loss from remeasurement of investments. During 3MFY23, the net profits of the Company amounted to PKR 30.6mln (3MFY21: PKR 34.6mln). AAML has an adequate equity base of PKR 1,080mln at end Sep'22 (Jun'22: PKR 1,083mln), which is above the regulatory requirement of PKR 230mln. The rating incorporates the Company's association with Atlas Group, a leading business conglomerate in Pakistan having investments in multiple sectors.
The rating is dependent on the Company’s ability to strengthen its market position in terms of AUMs, sustaining superior fund performance and upholding good governance and organizational structure. Meanwhile, customer outreach along with consistent fund performance remains imperative.

About the Entity
AAML, incorporated in August 2002, is a wholly owned subsidiary of Shirazi Investments (Pvt.) Limited – the holding company of Atlas Group. Atlas Group, founded in 1962 with the establishment of Shirazi Investments, is a diversified group having presence in manufacturing, power, financial services, and trading. The group consists of four companies listed on the Stock Exchange in Pakistan and a number of non-listed companies. The Company’s seven-member Board of Directors comprises five representatives of Atlas Group including the CEO, the other two are independent directors. Mr. Iftikhar H. Shirazi serves as the Chairman of the Board of Directors of AAML along with several other companies of the Group. The board has three committees for providing oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee and 3) Investment Committee. The Company had AUMs of PKR 44.3bln at end Sep'22 (Sep'21: ~PKR 51.5bln).

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.