FCAM’s Legacy Debt Fund Gets ‘A+’ Rating

The Legacy Debt Fund, a mutual fund managed by First City Asset Management Limited (FCAM), has had its credit quality risk rating upgraded by one notch, from A(f)) to A+(f), by Agusto & Co, the foremost pan-African rating agency.

The Fund which is registered with the Securities and Exchange Commission (SEC), was also assigned a fund volatility rating of FV3. The higher ratings indicates low to moderate exposure to downside risk (impairment to the net asset value) in the medium term.

FCAM is a subsidiary of FCMB Group Plc. The ratings assigned to Legacy Debt Fund was based on Fund Credit Quality Rating which is an evaluation of the degree of protection an investor has against losses arising from credit risk, and Fund Volatility Rating, which assesses the Fund’s exposure to downside risk arising from changes in market conditions.

A statement explained that the “A+(f)” credit quality rating reflects the Fund’s minimal exposure to downside risk arising from credit defaults, while the “FV3” volatility rating indicates the Fund’s moderate sensitivity to changing market conditions.

According to Agusto & Co, “the upgrade in the credit quality rating of Legacy Debt Fund is based on the Fund’s consistent practice of allocating more than 75% of the net assets in FGN securities.” Other reasons given by Agusto & Co for the Fund’s new ratings are investment in good quality assets, low exposure to liquidity risk, and moderate exposure to interest rate risk. The rest include no currency risk exposure, robust investment processes, and an investment team with adequate expertise, with its portfolio manager possessing over 19 years of experience.

Commenting on the upgrade, the Chief Executive Officer of FCAM, Mr. James Ilori, said, “Legacy Debt Fund has been upgraded by three notches, in the last one year. We thank the rating agency, Agusto & Co, for recognising our consistency, professionalism and hardwork, in the management of Legacy Debt Fund. In addition, we thank investors in the Fund, for trusting us to assist them in meeting their investment goals.”

The CEO posited, “our team of internationally trained investment professionals will continue to manage the Fund conservatively, whilst creating more value for unitholders, in line with the Fund’s Trust deed”.

In December 2017, Legacy Debt Fund received a risk rating upgrade of two notches, from BBB+(f) to A(f), by Agusto & Co. Legacy Debt Fund seeks to preserve capital and generate consistent income for unit holders. The Fund pursues its investment objective by investing in high quality, Naira-denominated Money Market Instruments and short maturity bonds rated by a Securities & Exchange Commission (SEC), registered credit rating agency. The current fund size is ₦1.96 billion.

FCAM which also manages two of Nigeria’s leading mutual funds – Legacy Equity Fund and Legacy USD Bond Fund, and has also opened the offer for its Legacy Money Market Fund, provides services that cut-across collective investment schemes such as mutual funds, which are predominantly for retail investors, as well as specialised discretionary portfolio management, for ultra-high and high-networth individuals as well as institutional investors. The company has consistently focused on delivering international standard wealth and investment management services, aimed at meeting investors’ desire for safety of investments, diversification and good returns.

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