Lahore, December 28, 2021 (PPI-OT):The rating reflects the Company’s (“786IL”or the “Company”) modest positioning in the competitive asset management industry. Currently, the Company is focusing on managing only one fund i.e. 786 Smart Fund. Since Dec’20, the assets under management of the Company increased by ~57%, to PKR ~871mln at end Sep’21. However, the market share remained stagnant at 0.1% as the industry grew at a faster pace. The rating also incorporates the Company’s good governance framework, experienced management team and adequate organizational structure.

The Company managed to improve the financial position and turned the losses into profits. The Company recorded a profit of PKR 3.3mln during FY21 (FY20: PKR 2.82mln). Other Income and share of associates’ also contributed to turning around the Company’s losses into profits. The Company has retained its investment advisory license, which would ultimately strengthen the existing revenue streams. The fund performance remained above the benchmark but below the peers average in the category. Currently, the equity stood at PKR 230mln at end FY21, which is above minimum equity requirement. Strong sponsor commitment is considered positive for the rating.

The rating is dependent on materialization of strategy to enhance AUM’s and market position of the Company. Meanwhile, maintaining strong fund performance and diversifying fund slate is important. Upholding high governance standards and strengthening of risk management is crucial for the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com