PACRA Upgrades Asset Manager Rating of AKD Investment Management Limited

The rating upgrade reflects AKD Investment Management Limited’s (“AKD” or the “AMC”) sustained progression over a longer horizon; the company has withstood tough and volatile market conditions. The prime factor has been the sponsor's unwavering support and the management's resilience in the wake of changing market conditions. The AMC manages a reasonably diversified portfolio of funds and is actively pursuing digital initiatives to keep pace with the rapidly evolving digital landscape. The AMC is also managing investment advisory portfolios and earning advisory fees, which contribute positively to its core income. Since December 2023, the asset management industry has experienced substantial growth of approximately 100%, with total Assets Under Management (AUMs) reaching PKR 4.3 trillion as of December 2024. This growth has been broad-based across all three major categories: Equity (105%), Money Market (105%), and Income (111%). Despite the rapid expansion of the industry, the AMC successfully maintained its market share. Notable growth was recorded in the Golden Arrow Stock Fund and AKD Cash Fund. Overall, the performance of the AMC’s funds has remained broadly aligned with industry averages. The efficacy and proficiency of the research function would remain critical for the performance of the funds. In terms of clientele mix, the AMC has a strong presence in the retail segment, with approximately 57% of its investor base comprising retail clients, while the remaining 43% consists of institutional investors. As of CY24, the concentration of the top 10 investors remained elevated at approximately 39.4%. On the financial front, the AMC reported a profit after tax (PAT) of PKR 115 million (6MCY23: PKR 68 million), with equity standing at PKR 409 million. To support the AMC’s ongoing business growth, the sponsors injected PKR 100 million as an advance against a rights issue. As a result, the equity base is expected to exceed PKR 500 million. Additionally, the sponsors are expected to contribute seed capital to the upcoming fund.
Going forward, the successful execution of the business strategy following the PKR 100 million capital injection will be vital to sustaining the assigned rating. Key considerations will include achieving sustainable business growth, maintaining consistent fund performance, reducing investor concentration, and ensuring adequate penetration in the other fund segment.

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 AMC is sponsored by AKD Group Holdings (Private) Limited. The Board of Directors of the AMC 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.