Interview Mohammad Shoaib, CEO, Al Meezan Investment
Mohammad Shoaib, CFA is Chief Executive Officer of Al Meezan Investment Management Limited, the largest Shariah compliant asset management company in Pakistan. He has over 28 years’ experience of managing investment portfolio. Al Meezan Investments currently manages equivalent of US$1 billion under 14 mutual / pension funds and discretionary client portfolios. It has a complete range of investment products in the risk return spectrum from very low risk products like Sovereign Fund, Cash Fund to high risk Equity Funds. It is one of the largest asset management companies in Pakistan. The company complies with Asset Manager Code of CFA Institute. It is also GIPS Compliant.
As CEO of Al Meezan, Shoaib manages a diverse team of over 500 members in various departments of the organization including Investments & Research, Product Development, Sales and Marketing, Finance and Operations, Information Technology, Internal audit, Risk Management & Compliance, Human Resources and Administration. The organization employs a large number of graduates and post graduates in various disciplines including Masters in Business Administration, Arts and Sciences, Chartered Accountants, ACCAs and CFA charter holders. He completed his MBA from Institute of Business Administration (IBA), Karachi in 1988 and has taught several courses at IBA as a visiting faculty member. He got his CFA charter in 1999. He was the founder and first President of CFA Association of Pakistan, which was set up by him in 2002. CFAAP is the representative body of CFA charter holders in Pakistan. During his leadership, CFAAP achieved several milestones. One of them was receiving the “Innovation Award” from CFA Institute for the Corporate Excellence Awards Program of CFAAP and “Strategic Planning Award”. Due to his contribution to the mission of CFA Institute, CFA Magazine listed him in 2006 as “MOST INFLUENTIAL” CFA Charter Holder.
Besides his involvement with CFA Institute, he has served or is currently serving in other volunteer capacities including: Nominee director on the Board of Karachi Stock Exchange appointed by SECP in Pakistan (2002 -2003); Board member of Institute of Capital Markets in Pakistan; Chairman of Mutual Funds Association of Pakistan; Director on the Board of Pakistan Institute of Corporate Governance (2011 – 2014); Member of the Academic Board of Institute of Business Administration, Pakistan; Member of the Central Bank’s Committee on Islamic Capital Markets
Shoaib has participated in various seminars, conferences and workshops across the globe during his 28 year career in managing investments. During the last 15 years of his career, he has focused exclusively on managing Shariah Compliant or Islamic portfolios. He has been a speaker / panelist at various conferences on the subject of Islamic Asset Management in Middle Eastern and Far Eastern countries. He has also been featured in CFA Magazine with reference to his contribution to Islamic asset management, corporate governance and volunteer leadership. Following are excerpts from his exclusive interview.
How do you review the performance of your company over the last five years?
Mohammad Shoaib: Two decades ago, we embarked on a journey to make Shariah Compliant investing a first choice for investors. Behind this initiative was the firm belief that our religion Islam provides us a complete way of life. This belief in the tenets of Shariah and the divine help from the All Mighty has helped us emerge successful even through the most challenging times.
Starting as a small asset management company back in 1995, we are now the largest Shariah Compliant asset management company with asset under management (AUM) amounting to about 100 billion rupees. Just to give perspective of our growth over the past 5 years, our AUM at the close of the fiscal year 2013 were a little over 45 billion rupees and by the beginning of 2017 we had more than doubled our AUMs. This achievement alone speaks volumes of the investment acumen the organization possesses. The current market outlook is very promising and we are hopeful for an even stronger 2018.
Which major milestones have been achieved in these five years?
Shoaib: Our focus is to “innovate and perform” in order to assist our customers accomplish their investment objectives. Al Meezan is committed to provide its customers with the halal competitive returns on their investments and offer the best quality services to our customers.
In addition to excellent performance of various funds in their respective categories, we promise prudent financial advice to the customers, outreach and awareness to masses, use of technology for efficient delivery of our services and above all fulfillment of fiduciary duties towards our clients. The past five years have been pivotal in our progress. Evolution in product portfolios, increased customer outreach and our nationwide footprint are just a few of the many milestones we have achieved.
Like most businesses we started small, but Alhamdolillah in a very short span we have increased our reach across Pakistan through a nationwide network of 20 Al Meezan Branches and over 600 Meezan Bank Branches. Our efforts to deliver the best in class investment solutions to our customers have been recognized by JCR-VIS time and again, with our first management quality rating upgrade to AM2 in 2014 and a further upgrade to AM1 in 2016; the highest management quality rating in Pakistan.
Can Al Meezan be termed the biggest AMC?
Shoaib: We focus on what we do best and that is to serve our customers fulfill their financial goals and help them increase their wealth over time. The leadership status is just a natural outcome of our business philosophy. We are the largest Shariah Compliant AMC and one of the largest AMCs in terms of AMU. We also have the biggest portfolio of discretionary and advisory clients. We are also the category leaders as the largest managers of private sector equity fund – Meezan Islamic Fund and Pension fund – Meezan Tahaffuz Pension Fund currently with assets under management of over 43 billion rupees and 9 billion rupees respectively. We owe this to our patrons and investors who have entrusted us with their wealth.
Which are major assets under management?
Shoaib: We offer a complete suite of investment solutions to help investors meet their financial goals. In addition to traditional equity, fixed income, and money market funds, we also manage a diversified portfolio of customized products including pensions, index tracker, balanced, gold, asset allocation and fund of funds schemes.
We pride ourselves in being the pioneer in launching the industry’s first Sovereign scheme, voluntary pension scheme (VPS), Fund of Funds and Shariah compliant commodity funds, amongst others. With this large variety on offer, Al Meezan is presently managing fifteen funds and several administrative plans under its umbrella to cater to the varying investments needs and unique circumstances of its clientele.
In addition, we provide Discretionary/Advisory portfolio Management Services to a number of local and foreign clients.
Has there been major change in the composition of assets under management?
Shoaib: Al Meezan offers a full breadth of products for its investors to choose from based on their risk and return profile. Our current (as of March 2018) exposure to equities is approximately 70% and 30% to Fixed Income and Money Market.
What is the size of Sukuk held by Almeezan?
Shoaib: The total investments of our fund in various corporate and GoP Sukuks is approximately 8.5 billion rupees.
Is there an increase/decrease in investment in Sukuk?
Shoaib: Sukuk holding patterns have been different based on the type of Sukkuk. Given the pricing of Ijarah Sukuks has been very volatile in the recent past, Al Meezan Ijarah Sukuk holdings are therefore maintained on the lower side at approximately 3-4 billion rupees. However, corporate Sukuk holdings have increased as investors who exited sovereign funds moved to other avenues like MIIF and MBF whose fund sizes increased, thereby resulting in higher liquidity for deployment in corporate Sukuk. In 2012-13 our funds had exposure in corporate Sukuk worth 1.0-1.5 billion rupees that currently ranges 5.0-6.0 rupees billion.