Mirror, mirror on the wall, who in this land is the wealthiest of all? Well, based on declared assets, that would be Mian Mohammad Mansha.
Will he get richer? Yes, in all likelihood, because his strong business acumen has once again encouraged him to explore opportunities in fund management industry.
The countrys sixth biggest investment management firm by assets size, MCB Asset Management Company, a wholly owned subsidiary of MCB bank Ltd, is seeking to merge with the fourth largest AMC, Arif Habib Investment Company Ltd.
If the deal goes through, the combined entity would become the biggest private fund manager with assets-under-management potentially crossing Rs29 billion, based on latest data available at the website of Mutual Fund Association of Pakistan.
The desire for the merger is driven by several benefits, mutual and complementary between the two. Each has its own unique strong points, which if combined, will have positive multiplier effect on the profitability of the new formed entity.
The good thing about MCBs AMC is that it enjoys strong brand equity of its parent company MCB Bank - recognized globally as a financially strong and trustworthy business partner. Being in financial industry, MCBs fund managers also get technical support from its parent firm.
From the perceptive of Arif Habibs funds, the new AMC can make a good use of the strong distribution network of MCB Bank, where personal wealth advisors at the banks numerous branches can offer their clients a variety of investment options to choose from.
On the other hand, the deal can help MCB AMC to capitalize from Arif Habib, since the latter has a well established presence in the market.
Arif Habib has a wide diversified portfolio that includes a number of funds with good performance record and an experienced staff, which has just received the top management quality rating by PACRA.
Moreover, the exotic partnership of these two renowned industry players would also present them with multiple benefits in terms of economies of scale - allowing the combined firm to become more cost-efficient and increase shareholder value though financial synergies.
In short, it appears like a win-win situation for both players, that is, if and when both parties reach a formal agreement and get the necessary regulatory approvals.
However, knowing MCBs recent experience with RBS Pakistan, one can be too sure about regulatory approvals. Who knows, when will some authority or another, raise a barrier saying Yeh shadi nahi ho sakti.
In any case, the move should trigger the first wave of mergers in Pakistans mutual fund industry. Let there be consolidation.
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