PACRA maintains Asset Manager Rating of AKD Investment Management Limited

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 composed of 08 open-end funds belonging to all major categories. These include aggressive fixed income, money market, index tracker, equity, shariah compliant equity, shariah compliant money market and shariah compliant income. Amidst the high interest rate environment in CY23 and beyond, the industry trend leaned towards money market investments. The AMC mirrored this trend, with approximately 60% of its total AUMs in the money market and income category as of the end of March 2024. The average market share of the Company fluctuated between 0.3% and 0.4%, during 9MFY24. The Company has strategized to improve its market share by strengthening retail penetration and by improving its technological platform. At end-Mar'24, the trailing 12-month return showed that the majority of the fund's performance in income and money market categories remained above market averages and successfully beat the benchmark. Whereas the equity funds remained in line with the peers. Furthermore, in terms of the Performance Ranking of Dec'23 and Mar'24, the equity category Fund of the Company has secured mean quartiles. The efficacy and proficiency of the research function would remain critical for the performance of the funds. The Company is also managing investment advisory portfolios and generating advisory fees which provides strength to the core income. The management fee has decreased by~10% and reached PKR ~58.8mln (Dec'23: 39.4mln, 9MFY23: PKR 65.6mln). However, the Company was able to maintain its profitability due to unrealized gain on investments on the back of improved stock market performance and a decline in operating expenses. The equity of the Company on the end of Mar'24 stood at PKR ~274mln (Dec'23: PKR 290mln), which is above the minimum capital requirement. Going forward, further diversification in the 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.

About the Entity
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 7.3bln at end Mar'24.