OREANDA-NEWS. National Rating Agency has lowered its reliability rating on Libra Capital Asset Management CJSC (Libra Capital AM) to ‘AA+’.

The rating downgrade is driven by the heightened risks faced by the company in 2015 in connection with its overly exposure to a single customer (a pension fund) combined with the dominance of pension assets in its total assets. At present, after the two-year moratorium on obligatory pension saving (OPS) contributions, the future of the pension system’s contributions component is under threat stemming from macroeconomic developments, namely the economic slump and the government's rising need to meet its social obligations. If the scenario in which the contribution component is abolished plays out, companies providing investment management services to non-state pension funds (NSPFs) might lose considerable parts of their assets. If the contributions component remains in place, one should not lose sight of the possible enhancement of changes in the NSPF regulatory framework concerning the diversification of pension savings management between several asset managers. We also note Libra Capital AM’s weak capital adequacy metrics and the revenue and net profit’s downward trend affecting the company’s profitability.

The rating is supported by the company’s increasing assets under management and return to profitability in 2014, despite some intra-year losses. Libra Capital AM’s assets are quite liquid, while the investment risk is low. The rating recognizes the high probability of owner support, efficient management team with considerable experienced in asset management and well-balanced investment policy.