Press Release

JCR-VIS Reaffirms MQ Rating of AWT Investments Limited
 

Karachi, January 18, 2019: 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 further information on this rating announcement, please contact the undersigned (Ext: 201) or Narendar Shankar Lal (Ext: 203) at 021-35311861-71 or fax to 021-35311872-3.



Javed Callea
Advisor

Applicable Rating Criteria: Management Quality Ratings (August 2018)
http://jcrvis.com.pk/docs/MQR-Mehtodology-201808.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2019 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited