Muhammad Azmat Shaheen
PACRA Maintains Asset Manager Rating of AWT Investment Limited | Outlook Positive
The assigned rating reflects the enhanced positioning of AWT Investments Limited ("AWTIL" or the "Company"). The prominent business acumen of the sponsor bodes well for the rating. The positive outlook finds comfort in structured investment process, sound governance, qualified management and an increase of 221.6% in AUMs since Jun'22, improving the market share from 0.2% in Jun'22 to 0.5% as of Jun'23. The Company has shifted its focus from SMAs to open-ended schemes which is evident from increasing trend in CIS-based AUMs. The asset manager is planning to further diversify its fund slate in voluntary pension schemes, Islamic Money Market and Islamic aggressive income categories. AWTIL's retail clientele stands at ~33% of the AUMs.
The Company has implemented enhanced version of Asset Connect (Java based) for Mutual fund segment. On technology side, the process is well underway for implementation of web portal and a market competitive mobile App. The technological developments will strengthen the retail footprints of the Company in a highly digitalized era. In reference to the organizational structure: qualified and experienced professionals have been hired for the positions of Company Secretary, Chief Financial Officer, Head of Operations, Head of Internal Audit and Head of Risk Management. The process for hiring in the Fund Management department for various positions has also been completed.
On the financial side, management fee has increased while the advisory fee declined, making the total investment income of PKR 65.2mln during 9MFY23 (9MFY22: PKR 57.8mln). The net loss after tax of PKR 62.3mln during the period 9MFY23 (9MFY22: loss after tax of PKR 47.3mln) is majorly attributable to elevated operating expenses from recent revamping of internal functions. Furthermore, the advisory fee declined on the back of decline in total SMA portfolio size. The Company's equity stood at PKR 296.6mln at end Mar’23 which is meeting the minimum equity requirement of PKR 230mln.
The rating is dependent on the Company’s ability to continuously strengthen its market position. At the same time, stability in key human resource, structured improvement in risk management framework and success of initiatives to increase retail AUM will remain crucial for the rating. Diversification in AUM base among various fund categories along with improvements in the overall operating platform will bode well for the Company.
AWT Investments Limited is a public unlisted company incorporated in August 2011 with head office situated in Rawalpindi. The Company is registered as an Asset Manager and Investment Adviser under the Non-Banking Finance Companies Regulations by the Securities and Exchange Commission of Pakistan (SECP). The Company’s Board of Directors comprises six members including the Chairman and the Chief Executive Officer. At FY23, AWTIL is offering six funds in Money Market, Equity and Income categories with aggregate AUMs of PKR 7.2bln (FY22: PKR 2.3bln).
Mr. Sajjad Anwar joined AWTIL in Mar'22. He is a seasoned Investment Professional with wide-ranging experience in the Financial Markets of Pakistan spanning over 23 years that involves Equity Research, Portfolio Management, Investment Advisory, Risk Management, and Finance & Accounts. For the last 16 years, he has been working in the Fund Management Industry.