PACRA Maintains Asset Manager Rating of Atlas Asset Management Limited

The rating incorporates Atlas Asset Management Limited's ("AAML" or the "Company") experienced management team, structured investment decision process, and adequate risk management framework. Strong ownership and good governance profile bode well for the rating. To expand its market penetration the management is focusing on strengthening its distribution outreach by expanding its network in Karachi, Lahore, PSW and RWP. Alongside, the management is also focusing on enhancing customer services, and improving its digital platform for better retail penetration. The same will be tested over time. The AMC has also acquired licenses of Private Equity and REIT Management funds and the management has plans to further widen its product offering. The assigned rating also considers market positioning, retail clientele, investor granularity and fund performance. Since Sep'22 the growth momentum of the AMC has depicted an increase of 20.5% and stood at PKR 53.3bln at end Sep'23. While the market share remained at an average of 3.2% as the overall market grew at a faster pace of 37%. Retail AUMs in relation to total AUMs stayed intact. The AUMs mix of the AMC depicts a good mix of equity category and Income/money market category i.e 25% and 75% respectively. While top-10 investor concentration in larger funds remains on higher side~80-90%. During the period under review, the funds’ performance compared favorably to peers for its larger funds. As of end Sep'23, the AUMs of the income/money market category under quartile 1 and quartile 2 accounted for 10% and 80% respectively. While under equity category falls under a 3-star ranking. Sustaining the fund performance across all categories along with maintenance of credit quality metrics will remain important for rating, going forward.
The Company remained profitable during FY23, the profit after tax stood at PKR 192mln at the end of Jun'23 (FY22: PKR 125mln). During 3MFY24, the Company's net profits amounted to PKR 107mln (3MFY23: PKR 30.6mln). AAML has a strong equity base of PKR 1,297mln at the end of Sep'23 (Jun'23: PKR 1,179mln), which is well above the regulatory requirement of PKR 230mln. The strong equity base bodes well to the rating. The Company shows sustained management quality with the lowest employee turnover rate among peers. The rating also incorporates the Company's association with Atlas Group, a leading business conglomerate in Pakistan having investments in multiple sectors.
The rating depends on the Company’s ability to strengthen its market position regarding AUMs, sustain superior fund performance, and uphold good governance and organizational structure. . While Improvement in investor granularity would remain imperative. Diversification in AUM asset class distribution would be considered positively from Management quality ratings purview.

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 with having presence in manufacturing, power, financial services, and trading. 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 to provide oversight on the Company’s affairs: 1) Audit Committee, 2) Human Resource & Remuneration Committee, and 3) Investment Committee. The Company had AUMs of PKR 53.3bln at end Sep'23 (Sep'22: ~PKR 44.2bln).