July 4, 2014 / 2:48 PM / 4 years ago

Fitch Rates Valoris Management 'High Standards(mar)'

(The following statement was released by the rating agency) PARIS/LONDON, July 04 (Fitch) Fitch Ratings has assigned Valoris Management a 'High Standard(mar)' National Asset Manager Rating. The Outlook is Stable. KEY RATING DRIVERS The rating recognises Valoris Management's robust compliance and control framework, its integrated technological platform covering front- to back-office needs and disciplined investment decision-making process. The rating also reflects the company's well-established position with Moroccan institutional investors and dynamic development over the past five years. Valoris Management's independence, combined with appropriate governance practices, provides for a good alignment of interests with investors. Main challenges facing the company are to further diversify its investor base and develop resources and practices relating to investment risk management. Valoris Management's 'High Standards(mar)' rating is based on the following category scores: Company: Good Controls: High Investments: High Operations: High Technology: High Asset manager operations in the 'High Standards (mar)' category demonstrate an investment platform and operational framework that Fitch considers strong relative to the standards applied by domestic institutional investors. Company: Created in 1999, Valoris Management is an independent asset management company owned by its two co-founding partners and, to a lesser extent, other senior executives of the company. Strong growth in its assets managed on behalf of local institutional investors and banking groups over the past five years allowed the company to consolidate its position as the sixth largest Moroccan asset manager by assets under management (AUM), and the first independent. Its solid profitability remains nevertheless sensitive to the concentration of its investor base. Valoris Management's teams are appropriately sized given the number and complexity of funds managed. Controls: The control framework allows a solid coverage of risk areas. It benefits from a good oversight from the compliance and control officer, independently from investment and operational teams, complemented by the company's risk committee. Detailed procedures and documented controls further support the effectiveness of the operational and control environment. Pre- and post-trade controls on compliance with investment guidelines and trading rules are automatically performed in Manar, the central position keeping tool. Investment risk management primarily rests on the portfolio management team. The liquidity risk is of almost systemic nature in Morocco, which makes its management delicate within the portfolios. Investments: Valoris Management's investment processes exclusively cover domestic markets for the management of fixed-income, money market, equity and balanced portfolios. They follow a disciplined committee-driven approach, combining top-down and bottom-up inputs. Decision-making is supported by in-house quantitative tools and a financial analyst providing simple equity, credit and macro research. Credit selection has to comply with the list of eligible issuers set by the company's risk committee. Operations: Middle- and back-office teams are adequately staffed given volumes and instruments used. Operational and valuation procedures are well documented, adequately controlled and robustly supported by Manar. Order matching with brokers and counterparties is a largely manual process. Similarly, reconciliations with custodians are manually performed daily on cash and monthly on securities. Technology: Manar, a local vendor application, is the central tool for position keeping, order management, controls on investment compliance and middle- and back-office activities. It provides a comprehensive, integrated coverage of the company's needs. Regularly tested, the business continuity plan includes a back-up server physically updated every week and a recovery site. Valoris Management is the asset management arm of Capital Gestion Group for open-ended funds. At end-April 2014, Valoris Management was managing MAD17.6bn worth of assets. In line with the overall local market, most of these assets are concentrated in domestic fixed income and money market assets (95%). The company employs six investment professionals, four middle- and back-officers and one compliance and control officer. Some activities such as commercial, IT, administrative and financial functions are outsourced to Capital Gestion Group as part of resource mutualisation within the group. RATING SENSITIVITIES The rating may be sensitive to material adverse changes to any of the aforementioned rating drivers, notably through weakened financial conditions, material operational loss, heightened staff turnover or deterioration of processes and policies. A material deviation from Fitch guidelines for any key rating driver could cause the rating to be downgraded by Fitch. Conversely, a significantly improved investor diversification and the development of investment risk management could lead to a rating upgrade. Contact: Primary Analyst Charlotte Quiniou, CFA Director +33 1 44 29 92 81 Fitch France S.A.S. 60 rue de Monceau Paris 75008 Secondary Analyst Francois Vattement, CFA Associate Director +33 1 44 29 92 75 Committee Chairperson Ian Rasmussen Senior Director +1 212 908 0232 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable criteria, 'Asset Manager Rating Criteria, dated 6 May 2014, are available at www.fitchratings.com. Applicable Criteria and Related Research: Asset Manager Rating Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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