The 'A' rating indicates that UNIVER Management LLC qualifies as a highly reliable management company. The risk of a failure to meet  obligations on time is low. The rating assignment was based on the Reliability Rating Methodology for Management Companies.

The key positive rating drivers for UNIVER Management LLC include improvements in the structure of off-balance sheet assets, the company's relatively high return on management of pension accruals across time intervals and relative sustainable financial profile.

The liquidation (winding-up) of some troubled closed-end mutual funds has reduced the amount of funds the company manages but substantially improved their structural profile, increased liquidity and transparency of assets, enabled the management team to focus on strategic issues in relations with the Company's key clients. As of January 1, 2016, the Company's largest business (closed-end mutual funds) accounted for approximately 75% of the total assets under management (compared with more than 86% at the start of the year). For the past year, the Herfindahl-Hirschman Index for the consolidated discretionary portfolio decreased from 7635 to 6614, the optimal value being 2000.

According to the pensiamarket.ru and investfunds.ru web portals, UNIVER Management LLC has achieved the highest long-term return on management of pension accruals transferred from the Pension Fund of Russia among leading Russian management companies. The accumulated return for the 2004-2015 period was 278%, which is equivalent to an annual yield of 11.7% p.a. and exceeds the inflation rate across the same timeframe.

UNIVER Management's conservative policy of investing pension accruals translated from the Pension Fund of Russia contributes to its rating. The Company is committed to maximum diversification and high reliability of the financial investment vehicles. The bank's deposits are opened with financial institutions rated by international rating agencies equivalent to 'A+' and 'A++' levels on the AK&M national rating scale. All sub-federal securities, municipal bonds, as well as 84% (taking the aggregate market value) of the Russian issuers making up the backbone of the Company's portfolio are on the Lombard List of Russia. The equity securities of Russian issuers account for a mere 3% of the investment case.

The Company traditionally maintains capital adequacy at a very high level, primarily owing to the zero loan debt burden. As of January 1, 2016, the equity to assets ratio reached almost 97%. The Company's equity (as of February 29, 2016) calculated in accordance with the Bank of Russia's requirements exceeds the minimum level set by the regulatory authority for companies managing investment funds, mutual funds and non-state pension funds more than twice. Net profit of the company for 2015 was RUB 13.3 million, 11 times above the financial result earned in 2014, 20% above the average level in the previous three years. The profit growth was largely driven by a twofold increase in revenues from discretionary asset management services. The Company's margin of financial viability can be regarded as a buffer securing it against a stress increase in market and/or credit risks as well as liquidity risks.

The key rating constraints in relation to UNIVER Management LLC include high concentration of assets of mutual funds, low return on management in certain business segments as well as a lack of stability in the client base.

The backbone of assets of the Company's investment funds is formed by non-residential real estate, mostly farmland (53% of the net asset value of mutual funds or 40% of the total amount of assets under management). The geographic diversification of the latter is fairly weak, while susceptibility to liquidity risks is immanently high.

In the last three years, 7 of the 8 closed-end mutual funds of UNIVER Management faced a negative average annual yield. Only 2 of the 10 open-end and interval funds achieved a return exceeding the MICEX Index taken as the key benchmark. The low management efficiency could trigger a partial outflow of clients.

In 2014-2016, despite an overall increase in the number of retail and corporate clients, the company lost three key clients which forfeited their banking licenses and licenses to provide pension provision and compulsory pension insurance services. This may eat into the Company's discretionary management incomes and accordingly, affect the financial viability of UNIVER Management LLC.

UNIVER Management LLC registered in Moscow in December 2002 currently qualifies as a medium-sized management company in terms of equity and assets controlled. UNIVER Management LLC specializes in the management of closed-end mutual funds as well as pension accruals of citizens transferred from non-state pension funds and the Pension Fund of Russia. According to a ranking prepared by the National League of Management Companies, as of December 31, 2015, UNIVER Management LLC ranked 20th among the privately-held companies engaged in the discretionary management of pension accruals transferred from the Pension Fund of Russia.

This press release is based on the Statement of assignment of a reliability rating to UNIVER Management LLC and the applicable Reliability Rating Methodology for Management Companies.

AK&M Rating Agency has assigned a rating to UNIVER Management LLC for the first time. All rating action announcements are available on the www.akmrating.ru website.

The rating is valid until April 2017. AK&M Rating Agency may revise the rating and/or the outlook during this period if circumstances fundamentally influencing the Company's reliability are revealed.

For estimation purposes, we completely rely on the reliability of information provided by the Company. The rationale for AK&M Rating Agency's judgment on the rating may include information acquired from other sources we deem to be reliable; however, the agency does not check the input data exhaustively and disclaims all responsibility for their possible errors.

The rating, along with any information and conclusions provided in this press release, only conveys our reliability opinion and shall not be construed as a recommendation to make investment decisions.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.

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