Muhammad Azmat Shaheen
PACRA maintains Asset Manager Rating of AKD Investment Management Limited | Positive Outlook
The assigned rating incorporates AKD Investment Management Limited's ("AKDIML" or the "Company") adequate corporate governance structure, and experienced management team. AKDIML is managing an adequate fund slate comprising equity, income, index tracker and money market categories, however, the equity category has a major proportion of total AUMs; on average ~41.2% as of Apr'23. Hence, the performance and AUM's size are majorly linked with the stock market performance which has been extremely volatile throughout the CY22. The Company is following a risk-aggressive approach to generate returns. The average market share of the Company fluctuated between 0.4% and 0.5%, during 9MFY23. The Company has strategized to improve its market share by 1) strengthening retail penetration, 2) improving its technological platform, and 3) launching new products. The retail portion of AKDIML has shown increasing trend throughout the review period and the Company has launched one fund under shariah compliant money market category in Feb'23 to strengthen its footprints in Islamic category. The AMC uses in-house MIS called FundXs, for NAV calculation. At end-Apr'23, the trailing 12-month return showed that the funds' performance in income and money market categories remained above market averages whereas the equity funds remain in line with the peers. Furthermore, in terms of the Performance Ranking of Apr'23, the AKD Cash Fund and AKD Islamic Income Fund of the Company have secured top quartiles, thus supporting the efficacy and proficiency of their research function.
The Company is also managing investment advisory portfolios and generating advisory fees which provides strength to the core income. The management fee of the Company has declined by ~29.1% during 9MFY23 as compared to 9MFY22. The Company remained in losses on the back of unrealized losses on investments and elevated operating expenses. However, the equity of the Company is meeting the capital requirements as at end Mar'23. Going forward, further diversification in AUM base among various fund categories along with improvements in the overall operating platform will bode well for the Company.
Augmentation in equity base which currently is close to regulatory requirements would stand imperative to the assigned rating. The positive outlook signifies income fund's performance and capable research team. The Company’s ability to successfully execute its business strategy and optimal utilization of its resources and materialization of initiatives into improved market share would remain imperative.
AKDIML commenced its operations in September 2004 and is registered as an Asset Management Company under the Non-Banking Finance Companies Rules, 2003. The Company is sponsored by AKD Group Holdings (Private) Limited (Formerly: Aqeel Karim Dhedhi Securities (Private) Limited). The Board of Directors of the Company comprises seven members, including the CEO Mr. Imran Motiwala, who has been serving as the Chief Executive Officer of AKD Investment Management Limited since 2009. The Company is currently managing eight open-end funds with assets under management of ~PKR 6.7bln at end Mar'23.