JCR-VIS upgrades Management Quality Rating of PICIC Asset Management Company Limited to AM3+

Karachi: JCR-VIS Credit Rating Company Limited has upgraded the Management Quality Rating of PICIC Asset Management Company Limited (PICIC AMC) to ‘AM3+’ (AM Three Plus) from ‘AM3’ (AM Three). Outlook on the rating is ‘Stable’.

PICIC AMC is managing the largest cumulative asset size in the closed end category. The AMC has successfully launched two open end funds in the income and cash fund category in FY11. While annualized return of the cash fund is comparable to peers and the full year return of the income fund is above the median; as recent launches, sustainability of their performance will be tested over time.

In the closed-end category, NAV based returns of PICIC Energy Fund (PEF) have generally remained superior to other funds in the category, while the performance of PICIC Growth Fund (PGF) and PICIC Investment Fund (PIF) have been affected by returns on the significant frozen portion in these funds. Rating however, incorporates recovery in cumulative asset size of closed end funds, primarily benefiting from better asset selection and a significant upturn in KSE-100 index during 2H-CY10.

The AMC made changes to the organizational structure by separating operations and HR departments, earlier working under the finance division, to effectively manage the expanded product offering. However, there was turnover in the company at some key positions. The top management has filled the gap both by hiring personnel from the industry and also tapping on resources available internally. The scope of internal audit was enhanced while reassigning the function to a reputable audit firm. A Disaster Recovery (DR) Plan is also in the process of being developed.

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