Karachi, January 18, 2019 (PPI-OT): Following the acquisition of Primus Investment Management Limited by Army Welfare Trust, JCR-VIS Credit Rating Company Ltd. has reaffirmed the Management Quality (MQ) Rating of AWT Investments Limited (AWTIL) at ‘AM3+’ (AM-Three Plus). Rating Watch-Developing status assigned to the ratings has been removed. Outlook on the assigned ratings is now ‘Stable’. The previous rating action was announced on December 15, 2016.
AWT Investments Limited (AWTIL) (formerly Primus Investment Management Limited) operates as a Non-Banking Finance Company (NBFC) with licenses to undertake ‘Investment Advisory’ and ‘Asset Management Services’. In 2017, the Army Welfare Trust (AWT) acquired 100% stake of Primus Investment Management Limited from Pak Brunei Investment Company Limited (PBICL).
The assigned rating takes into account sound profile of the existing sponsor, AWT, which has more than 4 decades of experience in the financial services sector, operating companies under the “Askari” brand in banking, insurance, leasing, financial services and asset management industries. Sponsor has demonstrated commitment by expressing intent to inject Rs. 100.0m equity in the company in order to ensure compliance with minimum equity requirement for Asset Management and Investment Advisory Companies. Rating is dependent upon recouping the decreased Assets under Managements (AUMs) post acquisition, revenue growth and strengthening of capitalization indicators.
Presently, AWTIL is managing 5 funds in the conventional income, equity and asset allocation categories as well as Islamic income and equity categories. Performance of largest fund, PIML Income Fund (IF), has improved as it ranked in the first quartile among respective peers in FY18 and the ongoing year. However, performance of other funds depicts room for improvement as the same ranked either in third or in fourth quartile of the respective peer groups. The company initiated advisory services to high net-worth clients in July 2018. Sizeable growth has been observed in Separately Managed Accounts (SMAs) in the period since July 2018.
Overall governance framework is considered satisfactory in the backdrop of induction of seasoned professional management team, adequate risk management practices and formalized investment process. Control framework is supported by audit, compliance and IT infrastructure. With growth in SMAs, control framework will be tested over time. Going forward, management envisages ambitious growth in AUMs. The achievement of the same in the given rating horizon would be an important rating determinant.
For more information, contact:
Director Compliance and Rating Analytics,
JCR-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: http://jcrvis.com.pk/