Press Release

VIS Reaffirms Management Quality Rating of UBL Fund Managers Limited
 

Karachi, December 31, 2019: VIS Credit Rating Co. Ltd. (VIS) has reaffirmed the Management Quality Rating of UBL Fund Managers Limited (UBL FM) at ‘AM-1’ (AM-One). The assigned rating of ‘AM-1’ (AM-One) signifies that the asset manager exhibits excellent management characteristics. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 27, 2018.

The assigned ratings incorporate UBL FM’s existing market position in the asset management industry with the company having a market share of 10.1% in total industry AUMs as at end-September 2019. Market position has weakened since last review due to sizeable maturities of financial planning funds while new fund launches did not attract the desired response due to adverse market conditions. AUM profile has witnessed some improvement with increase in proportion of retail AUMs and reduction in investor concentration levels. Sales strategy is focused on enhancing sales force efficiency and focused alignment with UBL Bank in order to increase outreach and targeting UBL Bank corporate and high net worth customers (of signature branches).

Ratings also take into account Company’s sound governance framework as reflected by professional management team, satisfactory board oversight, along with adequate risk management and control framework. Resolving outstanding discrepancies related to KYC backlogs remains the key focus on the compliance front while a more stringent employee trading policy is also planned to be implemented.

UBL FM’s investment decision making process is well-structured and formalized. Relative performance ranking of equity funds was in the top quartile while performance of most fixed income funds lagged relative to peers. Despite decline in core revenues, profitability profile compares favorably to peers. As part of a deliberate strategy management has focused on increasing budgetary allocation of sales and investment team while optimizing back office cost through automation. Ratings remain dependent on improving market position and AUM profile, achieving superior fund performance vis-à-vis peers and resolving outstanding discrepancies related to KYC and AML within stipulated timelines.

For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext: 213) or the undersigned (Ext: 201) at (021) 35311861-66 or email at info@vis.com.pk.




Javed Callea
Advisor

Applicable Rating Criteria: Asset Management Companies Rating (June 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/AMC-Methodology-201906.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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