Business

HBL Asset Management acquires PICIC Asset Management

Transaction amounts to Rs4.1b, assets under management will now increase to Rs42.7 billion

Our Correspondent February 18, 2016

Latest industry-wide data shows HBL Asset Management will become the largest player in the asset management industry. PHOTO: FILE

KARACHI:

The asset management subsidiary of Habib Bank (HBL) has acquired 100% shares in PICIC Asset Management, a stock filing said on Thursday.

HBL Asset Management will take over PICIC Asset Management, a subsidiary of NIB Bank with assets under management of approximately Rs23 billion in eight mutual funds, for Rs4.1 billion.

Mutual interest: HBL’s subsidiary to acquire PICIC Asset Management

Despite repeated attempts, HBL Asset Management CEO Rehan N Shaikh was not available for comment. The assets under management of the acquiring entity, which currently amount to approximately Rs19.7 billion, will increase to Rs42.7 billion following the completion of the transaction.

Latest industry-wide data available on the website of the Mutual Funds Association of Pakistan (MUFAP) shows HBL Asset Management will become the largest player in the asset management industry following government-owned National Investment Trust, Al Meezan Investment Management, MCB-Arif Habib Savings and Investments, UBL Fund Managers and NBP Fullerton Asset Management.

The overall size of the asset management industry at the end of January was Rs484.1 billion. This translates into a market share of about 8.8% for HBL Asset Management in the post-acquisition scenario.

Financial moves: HBL looking to acquire First Microfinance Bank

Asset Management Companies (AMCs) seek money from retail as well as institutional clients and then invest them in shares, bonds and government securities by setting up mutual funds with distinct investment strategies. AMCs generate revenues by collecting management fees that typically range somewhere between 1% and 2% of their assets under management.

HBL Asset Management runs two equity funds, two money market funds, one income fund, one balanced fund and one capital-protected fund. It also runs two voluntary pension funds.

In contrast, PICIC Asset Management is managing six open-end funds and two closed-end funds with a clientele of 40,000 investors. Like its acquirer, PICIC Asset Management also manages two stock funds in addition to income and money market funds.

Published in The Express Tribune, February 19^th, 2016.

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COMMENTS (2)

Fawad Gilani | 8 years ago | Reply @Brainy Bhaijan: You are right Brainy Bhaijan! They are run by Choors like AKD!

Brainy Bhaijan | 8 years ago | Reply There is no "management" being done by these so-called asset management firms. They take fees from their clients and then just buy into gov bonds or the stock market. We will soon come to find out about their efficacy in the next market crash.

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