New player: Primus Investment Management has now grown like no other, says CEO

Company’s AUM surpasses many after just one-and-a-half years.


Our Correspondent February 13, 2014
Launched with Rs2.3 billion in August 2012, AUM of Primus Investment Management have grown at an average rate of 8.3% per month since inception. DESIGN: JAHANZAIB HAQUE

KARACHI: In the wake of unprecedented returns in the stock market, many asset management companies (AMCs) seem to be in a rush to push gullible individuals into equity investments.

But the decision of Primus Investment Management – a relatively new player that entered the mutual funds industry in August 2012 – not to jump on the equity bandwagon immediately while the stock market boomed was well-considered, according to the company’s chief executive officer Ahmed Ateeq.

“I was waiting for the right time to launch an equity fund,” Primus Investment Management CEO Ahmed Ateeq told The Express Tribune in a recent interview.

Primus Investment Management is now launching two new funds – Islamic Equity Fund and Islamic Money Market Fund – to cater to the Shariah-compliant segment of capital market investors.

With total assets under management (AUM) of Rs8.9 billion at the end of January, Primus Investment Management currently runs two money market funds – Primus Daily Reserve Fund and Primus Cash Fund – and a balanced fund under the name of Primus Strategic Multi-Asset Fund, which was launched last August.

“I challenge you to compare our fund’s performance with the first year’s track record of any AMC in Pakistan. None of the Pakistani AMCs have grown like we have,” Ateeq observed.

Launched with Rs2.3 billion in August 2012, AUM of Primus Investment Management have grown at an average rate of 8.3% per month since inception. In January, the year-on-year increase in AUM was over 140.7%. This makes Primus Investment Management the 13th largest player among 23 AMCs operating in the country in terms of AUM.

Although the company is just one-and-a-half years old, its AUM have surpassed many well-established AMCs that are backed by strong financial institutions, such as KASB Funds, PICIC Asset Management and Habib Asset Management.

Returns of Primus Daily Reserve Fund have been exemplary among the 21 money market funds of Pakistan. For example, its year-to-date annualised return on February 12 was 8.6%, which is the highest return posted by any money market fund in Pakistan over the same period.

Not just that, Primus Daily Reserve Fund has outperformed every single money market fund in terms of the annualised returns for 365, 270, 180 and 90 days, as of February 12, which is clearly a remarkable accomplishment for a new company.

One distinctive characteristic of Primus Investment Management, that Ateeq prides himself on, is his company’s capacity to redeem investors’ money, however big the amount is, in a single day without having to sell any assets.

Noting that other AMCs also redeem quickly, he adds that mostly they have to sell treasury bills in the market at unrealistic yields when they receive a big redemption request. “On the contrary, we manage our assets in a way that our maturity period is short. With our daily product accounts and negotiated rates with banks, our investment is so diversified that we never have to sell any investments,” he noted.

The company’s fund manager’s report for January shows 38.4% of portfolio allocation for the Primus Daily Reserve Fund consisted of cash at banks. Placements with banks and development finance institutions constituted another 1.7% and 10.2% of the portfolio allocation, respectively.

“We keep our money with AAA-rated banks only. No matter how big the redemption request is, all I’ll have to do is simply write a check and redeem it,” Ateeq said.

Published in The Express Tribune, February 14th, 2014.

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COMMENTS (2)

Ahmed Ateeq | 7 years ago | Reply

Sir,

Slow and Steady wins the race. Please do let me know how can I be of any help.

You heard wrong, we don't have any money with aforementioned bank, its with AAA rated bank and till now people know which one.

Regards,

Ahmed

Competitor | 7 years ago | Reply

Ateeq was waiting for the right time to launch an equity fund? meaning he was waiting for the KSE 100 to go from 15,000 (level in august 2012) to 27,000 (level today)? we must all applaud a strategy that chooses to miss out on an 80% return!

The AAA rated bank he speaks of is ZTBL which actually has an entity rating of A and is facing delinquency on 1/5 of its lending portfolio. Have heard their trustee has ordered them to close down the ZTBL accounts as they breach SECP regulations for money market funds.

Also the only reason the Primus daily reserve fund has such high net returns is because it has a management fee of just 0.45% which after AKD cash fund is the lowest in the industry. If you compare gross returns which is a true measure of investment performance then Primus daily reserve fund is ranked 13th out of 21 in the last 30 days and 17th out of 21 in the last 90 days.

However congrats on the rapid growth in AUMs to become an AMC of decent size, that is an achievement to be proud of.

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