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.
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.
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.
