SERVING A WIDE SPECTRUM OF INVESTORS

Interview: Asad Javed, CEO We Investment Management Ltd

AMANULLAH BASHAR
Apr 02 - 08, 2007

WE Investment Management Limited (WEi) is one of the leading fund managers and on the back of a strong team of professionals it is excelling in the market with a focus to cater to the needs of a variety of investors from all walks of life. In order to present an overview of the secondary market in Pakistan, PAGE interviewed Asad Javed, CEO of the company.

PAGE: Would you like to outline the background of your company and, of course, its performance as well as your upcoming products?

ASAD: Our first fund was launched in November 2006 with a paid-up capital of Rs. 200 million. It is a close-end balanced fund by the name of WE Balanced Fund. The performance of the fund can be reflected by its NAV, which reached 10.40 in a very short span of time. Currently, we are working to launch another fund this year. Furthermore, we have several other projects in pipeline to cater to the needs of a broad spectrum of investors.

BACKGROUND

WE Investment Management Limited (the company) was incorporated on December 07, 1994 as private limited company and subsequently converted into public limited company in 2004. Total paid-up capital of WE Investment Management is Rs. 50 million. The company is a subsidiary of WE Financial Services Limited, Corporate Member of the Karachi Stock Exchange Guarantee Limited since 1993.

WEi has successfully launched its first closed-end fund by the name of WE Balanced Fund in November 2006. The fund size is Rs. 200 million. The NAV of the fund stands at 10.40 as on April 29, 2007.

The investment strategy of the fund is to invest in large, blue chip companies, high quality bonds, TFCs and money market instruments in order to create a quality portfolio, which provides investors with consistent capital gains and income.

WEi's vision is to become investment manager of choice that manages a series of funds, catering to a broad spectrum of investors.

WEi's priority is to provide superior returns to our shareholders by managing a series of funds in capital and money markets through competent professionals who act with integrity and best of professional conduct and strive to achieve investment objectives for the benefit of our clients.

FUTURE PLANS

We have started our operations since November 2006, and have a single fund worth Rs. 200 million. We plan to increase the funds managed by WEi to Rs.1bn during the next two years. For that we intend to offer a series of closed and open-ended fund. Our focus will mainly be on open-ended funds, as it will give us the flexibility to offer customized investment option according to the investment needs of different market segments.

PAGE: What is the average rate of return to the investors both in open and closed end funds?

ASAD: The average rate of return of the overall mutual fund industry has been over 12% during the last few years, which is much higher than what banks offer to their depositors.

PAGE: Banks are offering a very little return to the depositors; this is an area that can be exploited by mutual funds with innovative products. What mutual fund industry can do in this respect?

ASAD: In fact, it is a matter of creating awareness amongst the mass potential investors, especially the bank depositors. It has been generally a norm to keep money in banks as the capital is guaranteed, however, returns are always minimal. Mutual funds mostly attract educated investors who understand the risk and return reward offered by these funds. Many developments have been carried out in the area of educating the masses, which will eventually create more awareness as to the other venues for investments, such as mutual funds. Mutual Fund Association of Pakistan (MUFAP) has been very active in this regard. In addition, asset management companies have dedicated sales and marketing staff, which is playing an important role in increasing awareness.

PAGE: Would you like to discuss risk factor in the mutual funds industry from investors point of view, especially in view of the volatile and unpredictable stock markets in our country.

ASAD: Mutual funds have always been a safer medium to invest in the stock market. The stock markets are always a risky place and taking positions via a mutual fund is preferable because of diversification and due to the expertise of the professional fund managers.

PAGE: Some asset managers had initiated some products for the pensioners; is your company endeavoring to tap that area?

ASAD: We are exploring and evaluating several options not restricted to pensioners only. Market appetite is definitely there. Once our evaluation process is completed we would come out with attractive products.

PAGE: How do you see the future of mutual funds in Pakistan in the face of growing competition and government-backed national saving schemes?

ASAD: With the growing knowledge and information on the industry and entrance of new funds one after another over the past few years, we foresee a very bright future for this industry, especially when investors are keen to have choices amongst the fund managers. In this regard, the track record of the fund managers along with their credit ratings will be crucial.

In the past, National Saving Schemes (NSS) had been the main cause of sluggish growth in the mutual fund industry, reason being higher risk free returns. However, the reduction in the profit rates has led to better understanding and subsequent growth of the mutual fund industry.

DIRECTORS

MR. NESSAR AHMED - CHAIRMAN

Mr. Nessar Ahmed did his MBA from the Institute of Business Administration in 1973. He started his career from National Development Finance Corporation where he worked for 16 years. He then joined Crescent Investment Bank (Cresbank) as President and CEO. Under his stewardship, Cresbank prospered and its capital base increased from Rs. 100 million to Rs. 1,400 million. Currently, he is engaged in consultation to various groups in the industrial and financial sector. Having over 30 years of experience in investment and development banking, his views and opinions are given due weight by the professionals in the investment and financial community.

MR. ASAD JAVED - CHIEF EXECUTIVE OFFICER

Mr. Asad Javed has over 10 years of experience in equity sales, management of equity portfolio, risk management and arbitrage. He has worked as director equity sales at WE Financial Services where he provided the direction to Capital Market Department. He has groomed a team of professionals who are serving across the industry. After graduating from United States he started his career from Crescent Investment Bank Limited and was involved with Merchant Banking Division. He was one of the two-member team, which managed funds of approximately Rs. 2 billion for Crescent Investment Bank.

MR. JAVAID B. SHEIKH

Mr. Javaid B. Sheikh did his MBA from Sandiego, California, in 1982; he has worked across the globe in different capacities. He has worked as CEO in Fidelity Investment Bank and Fidelity Securities Pvt. Ltd and was Chairman of Fidelity Leasing Modaraba. After the merger of the previously mentioned companies with Crescent Commercial Bank, he became the SEVP/Country Head Investment Banking Group & Special Asset Management Division and worked in this capacity till October 2005. He is currently acting as a director in Trust Leasing and Investment Bank Limited.

MR. NAVED UL HASSAN

Mr. Naved-ul-Hassan is an Associate Member of the Institute of Cost and Management Accountants of Pakistan (ICMA) and Member of the Institute of Corporate Secretaries of Pakistan (ICSP). He is currently serving as the Head of Finance of WE Financial Services Ltd.

MR. AZHAR JAVAID

Mr. Azhar Javaid is currently working in WE Financial Services Ltd. as the Head of Research where his area of responsibilities include Equity Research and Corporate Finance. His qualifications include an MBA as well as a Masters in Computer Science.

MS. MARIA FARIDI

Ms. Maria Faridi started her career as a Research Analyst at WE Financial Services Ltd., a position that involves extensive sector and economic insight, on completion of her Masters degree in Business Administration. Along with the equity research she was also responsible for corporate finance transactions and project feasibilities.

MR. ASIF AHMED - COMPANY SECRETARY

Mr Asif Ahmed is an Associate Member of Institute of Cost and Management Accountants of Pakistan (ICMA) and Institute of Public Finance Accountants. He is currently serving as Chief Financial Officer and Company Secretary in WE Investment Management Ltd.