Press Release

VIS Reaffirms Management Quality Rating of Al Meezan Investment Management Limited

Karachi, December 31, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Management Quality Rating (MQR) of Al Meezan Investment Management Limited (‘AMIML’ or the ‘AMC’) at ‘AM1’ (AM One). The MQR of ‘AM1’ indicates that the asset manager exhibits excellent management characteristics. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on December 29, 2023.

Headquartered in Karachi, AMIML operates as a subsidiary of Meezan Bank Limited (MBL), the largest Islamic bank in Pakistan, with Pak Kuwait Investment Company Limited (PKIC) as another key stakeholder. AMIML leverages a well-established brand and an extensive track record in Shariah-compliant asset management. Its core activities include managing Collective Investment Schemes, Voluntary Pension Schemes, and providing investment advisory services. The assigned rating reflects AMIML’s strong corporate governance framework, supported by a well-structured Board and Committees that uphold best governance practices. Additionally, the senior management team comprises experienced professionals with deep industry knowledge and specialized expertise, reflective in the sustained growth of the AMC.

The assigned rating reflects AMIML’s position as the largest Asset Management Company (AMC) in the industry with a market share of 18.4% by end-Jun’24. The substantial difference in Assets Under Management (AUMs) between AMIML and the second-largest player underscores its market leadership. This position is further supported by AMIML’s strong parentage, which provides financial strength, credibility, and strategic backing. As of Jun’24, the AMC held a dominant 29.0% market share in the income fund category, while maintaining a stable presence in the money market category with a market share of approximately 15.0%. In the equity fund category, AMIML ranks as the second-largest player, holding a competitive market share of 15.7%.
The rating is supported by AMIML's disciplined investment process, which enhances operational efficiency coupled with its structured decision-making approach, underpinned by comprehensive research and effective risk management practices. AMIML demonstrates strong revenue generation capabilities due to its substantial operational scale and consistent inflows of management fees.

The rating reflects AMIML's strong competitive position, particularly in terms of retail penetration, with an improved retail penetration of approximately 74%, solidifying its leadership in the market. The AMC’s strategic outreach and digital transformation initiatives have played a key role in expanding its retail market share, securing a significant portion of retail investments. Additionally, AMIML’s diverse product portfolio, focused on Shariah-compliant investment solutions, caters to a broad range of investor needs, mitigating concentration risks and enhancing resilience to market fluctuations. Fund performance has shown improvement, with the proportion of AUMs in the first and second quartiles rising to 41.4% (FY23: 36.0%) in FY24 and further increasing to 63.0% by 1QFY25, indicating consistent progress.

Going forward, maintaining market leadership and improving the relative performance of its funds will remain important from a ratings perspective.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria: Asset Management Companies
https://docs.vis.com.pk/Methodologies%202024/AMC-Methodology-201906.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .