Karachi, December 31, 2021 (PPI-OT):VIS Credit Rating Company Ltd. has reaffirmed the Management Quality Rating (MQR) of Faysal Asset Management Limited (‘FAML’ or ‘the AMC’) at ‘AM2’+ (AM-Two Plus). The rating signifies asset manager exhibiting very good management characteristics. Outlook on the assigned rating is ‘Stable. The previous rating action was announced on August 10, 2021.
The assigned rating incorporates FAML sizable market positioning, retail clientele, investor granularity and fund performance. In our latest review, we have noted continuation of strong growth momentum, with AUMs rising from Rs. 30.1b as of Jun’20 to Rs. 74b as of Nov’21. Resultantly market share has improved on a timeline. Retail AUMs in relation to total AUMs stayed intact, albeit we have noted improvement in investor granularity. Fund performance remained strong in FY21 with 10 off 22 funds (representing 45% of AUMs) posted return rankings in the first quartile.
The AMC launched 7 new funds during FY21 which includes 4 schemes of Faysal Islamic Financial Planning Fund in addition to Faysal Cash Funds (conventional and Islamic variants) and one Islamic Equity Scheme Faysal Islamic Stock Fund. During 5M’FY22, the AMC further enhanced its product range by launching 4 new funds, including 2 pension funds (Conventional and Islamic), Faysal Shariah Capital Preservation Plan (VIII) and Faysal Special Savings Fund. As of Nov’21, FAML had a total of 28 funds in its product portfolio.
Faysal Funds has also acquired licenses of Private Equity and REIT Management funds and the management has plans to further widen its product offering. Majority (77%) of the AMC’s AUMs pertain to the money market/income segment. Diversification in AUM asset class distribution would be considered positively from an MQ ratings purview. In line with the conversion of FBL to an Islamic Bank scheduled for 2022, the AMC will also eventually be transformed to an Islamic AMC, which is likely to pose a challenge for FAML in terms of maintaining market positioning. VIS will continue to closely monitor FAML’s market positioning on an ongoing basis.
Given the increase in AUMs, revenue stream posted notable improvement with the AMC transforming into a profit making entity. The rating incorporates demonstrated track record of support from Faysal Bank Limited (FBL), such as the equity infusion of Rs. 500m in 2020. In addition, FBL also assists the AMC in terms of guidance on investment policy decisions. Internal investment decision making infrastructure and control infrastructure is considered adequate. The assigned rating remains dependent on maintenance of market positioning, investor granularity and funds’ performance.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/