Saudi Arabiaâs Jadwa Asset Management was assigned an MQ2 Investment Manager Quality rating by Moodyâs, which indicates a high quality management and control environment.
The investment manager, which is a division of Saudi Arabian investment bank Jadwa Investment, was found to have very good investment management capabilities, a positive financial profile and high quality investment performance.
In the announcement of the rating, Moody’s said that at the same time, the rating also takes account of the firm's limited operating history, exposure to "key man" risk and the challenges the firm may face in managing growth.
But nevertheless, the ratings agency noted that Jadwa outperformed its peers within the Saudi and GCC equity arena since the launch of the firm's flagship funds in 2007. This performance track record is the result of Jadwa's investment discipline and has resulted in the recent growth in assets under management.
Michael Eberhardt, Moody's vice president and lead analyst said: "Jadwa has built an investment management platform that will be able to support further growth in assets. Moody's expects the team's disciplined investment process to contribute to further outperformance in Jadwa's niche markets.”
In Moody's opinion, Jadwa demonstrates the effective organisational structure and high standard of corporate governance characteristic of MQ2-rated investment firms. Jadwa's investment process is well structured and follows a top-down and bottom-up investment approach, drawing upon the investment team's discipline to combine a valuation and macro-driven asset allocation with fundamental stock selection.
Jadwa's primary challenge to grow is personnel-driven. A shortage of local investment talent and the challenge of retaining key members of the investment team are likely to test the investment manager’s ability to maintain the high standard of its personnel.
However, Moody's noted that the firm has been successful in attracting talent both locally as well as from outside the GCC, which bodes well.
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