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Tuesday April 23rd, 2024

CT CLSA’s Bimanee Meepagala on Reviving the Economy and Succeeding in a Turbulent Market

Bimanee Meepagala – Director and Chief Executive of CT CLSA Asset Management

Bimanee Meepagala, Director and Chief Executive of CT CLSA Asset Management, shares insights on economic revival, challenging stereotypes, and achieving success in the fund management industry.

As a leader in an industry long dominated by males, she underscores the significance of comprehending the cyclical nature of economies and markets, advocating for reforms, and reinforcing governance frameworks to foster stability and growth. Moreover, Bimanee emphasizes the importance of merit-based practices, cultivating diversity, and inclusivity, and promoting work-life balance to empower women in professional roles.

As a leader of a successful fund management company, what is your outlook for the economy? What should Sri Lanka prioritize to revive and stabilize the economy?

Looking back a year or so ago, it’s hard to imagine we would be where we are today. It underscores the cyclical nature of economies; we’ve transitioned from a downward spiral to a gradual upturn. Growth is picking up with 3Q2023 GDP numbers coming in at +1.6%, a decline of interest rates from 30% to 9% and our reserves swelling to $4.4 billion, thanks to consistent dollar purchases made by the Central Bank. While this signals positive momentum, it’s crucial to acknowledge the strains this stability has placed on local consumers due to steep rises in taxes both direct and indirect. Decreased local consumption, particularly among the middle class, reflects discontent, especially with elections looming. How voters respond will significantly shape our economic trajectory. Sri Lankans must prioritize responsible economic policies over populist measures that have contributed to our current challenges. 

Otherwise, we risk jeopardizing the fragile stability we’ve achieved, potentially regressing into a worse situation than before.

Moving forward, we must prioritize reforms that have been overlooked over the last 70 years. We must remain steadfast on this reform trajectory. Additionally, Sri Lanka’s governance framework, which has historically lacked robustness, requires significant strengthening. Consistency is key; we must adhere to the path we’ve chosen without wavering, regardless of political shifts. It’s a challenging task, but one we must persistently pursue.

CT CLSA has had an impressive run with AUM growing 10 times in a year. What was behind this success?

Our success can be attributed to our deep insights into macroeconomic research, which allowed us to navigate through turbulent times effectively. One of the major challenges we faced was related to the domestic debt restructuring, particularly in 2023. Understanding the potential impact on our clients was crucial, so we conducted a thorough analysis, including stress testing and scenario planning.

We meticulously examined various scenarios, considering factors like potential haircuts of 20%, 30%, or even 50% on a possible domestic debt restructuring outcome. Despite the risks involved, we believed that the prevailing interest rates justified the risk, even in the event of a domestic debt restructuring. However, we maintained the conviction that the local market was fragile, and Sri Lanka couldn’t afford a broad-based haircut across the financial services sector.

Our strategy focused on positioning our clients in long-term bonds with higher yields, ensuring stability amidst market uncertainties. The strategy has paid rich dividends as interest rates have sharply reduced to 11% -12%. This approach has proven beneficial, providing our clients with consistent returns while mitigating potential risks and capitalizing on market volatility.

The financial sector is notoriously difficult to navigate, especially for women in professional roles due to the prevalence of gender stereotypes. How are you, as a female leader, helping break stereotypes and foster a diverse and inclusive workplace?

In the asset management industry, both globally and locally, there’s a predominant presence of male professionals. However, an encouraging aspect for women in this field is that performance is the primary metric for success, and it’s inherently gender-neutral. Regardless of gender, superior performance speaks volumes and is recognized and rewarded accordingly.

This gender-neutral performance evaluation creates a level playing field for both men and women to showcase their talents and capabilities. Our approach to hiring and career progression is strictly based on merit, not gender. We prioritize skills, expertise, and dedication when considering candidates for roles within the company.

Our commitment to merit-based practices ensures equal opportunities for all employees, regardless of gender. By fostering a culture that values performance and talent above all else, we break stereotypes and create a diverse and inclusive workplace where everyone has the chance to thrive and succeed.

One of our key focuses is achieving work-life balance, particularly for women who may face challenges balancing career and family responsibilities, especially when children are young. We recognize the importance of flexibility and understanding in accommodating diverse needs, beyond just providing maternity leave. Our emphasis is on getting the job done efficiently, regardless of where or when the work is completed.

The bitter truth is that young women have to put in extra effort often to prove themselves in many sectors of the economy when compared to male counterparts due to stereotypes and social norms.

Drawing from your experience, what should women cultivate to succeed in the fund management industry?

I believe its meticulous planning in both my personal and professional life, ensuring I can be there for my family during challenging times while also fulfilling my work responsibilities. Balancing these aspects requires moderation and discipline, both of which I emphasize in my routine.

I’ve been fortunate to receive abundant support from my family, allowing me to maintain personal routines like walks or gym sessions, which help me recharge and stay focused. Consistency is key to avoiding distractions.

Assertiveness is essential both at home and in the workplace, particularly in making tough decisions. Creating an understanding environment fosters personal and professional growth, enabling women to thrive amidst various responsibilities and challenges.

What are the inherent strengths women can bring to the table and add value to the fund management industry?

Women often demonstrate strong skills in risk assessment, honed through the experience of parenthood, where careful decision-making is paramount. This ability to manage risks strategically is a valuable asset they bring to various roles.

While societal expectations often emphasize warmth and kindness in women, leadership demands assertiveness and competency in the role you perform. This blend of qualities makes women effective negotiators, capable of navigating complex deals with grace and determination. Effective communication is also a hallmark of female leadership, with women excelling in articulating thoughts and ideas to stakeholders.

At CT CLSA, our core values revolve around commitment, trust, and continuity, which are integral to our interactions. Trust is foundational, and women excel in fostering and maintaining it through honesty and integrity.

Continuity is another area where women excel, valuing long-term relationships and sustainable outcomes. Whether delivering consistent returns or nurturing client interactions, women understand the importance of continuity in building lasting partnerships.

Overall, women bring a diverse skill set to the table, encompassing emotional intelligence, strategic thinking, and a commitment to integrity, contributing to their success as leaders.

In Sri Lanka, while female participation in the labour force is notable at entry levels, it declines at higher levels due to childcare sacrifices. Corporations should be more open to hiring women returning to the workforce after career breaks. Societal attitudes towards women taking career breaks need to evolve, recognizing the essential role of caregiving.

In addition, there has been a notable increase in female representation in various roles, indicating further progress. However, efforts are needed to nurture and retain young female talent, especially in mid-tier positions. Enhancing diversity in the capital markets, including fund management, stockbroking, and fixed-income dealing, is critical for advancing Sri Lanka’s financial landscape.

Looking back, what’s the most important lesson you learnt in your career?

I would say the most important lessons economics and markets have taught me over the years with its up-down cycles is the fact that you need to have an intellectually curious mind and think beyond norms.

As for my career journey, I began as a research analyst and steadily progressed within the asset management industry, eventually reaching the position of Director/CEO at CT CLSA Asset Management. Along the way, I also ventured into the insurance sector, where I headed the bank assurance division of a leading insurer. Each step has been fascinating, contributing to the diverse path I’ve taken in my career.

When reflecting on important lessons, I’ve found that understanding the cycles of markets and economies is crucial. Just like in life, there are peaks and valleys, requiring us to maintain intellectual curiosity and think beyond conventional wisdom. In investments, we anticipate and prepare for different cycles, adapting strategies accordingly. This foresight is equally valuable in life, where planning is essential. By fostering an open mind and sticking to core principles, even during challenging times, we can navigate uncertainties with resilience and integrity, ultimately finding success both in markets and in life.

In the context of working in emerging markets, adaptability is crucial. Unforeseen events like the Easter Sunday bombing followed by the COVID-19 pandemic in Sri Lanka highlight the importance of agility. Despite the challenges, during the peak of the pandemic, market turnovers reached all-time highs, indicating the market outlook amidst uncertainties.

To navigate such uncertainties, it’s imperative to think outside the box and remain flexible in our approach. For instance, during periods of low interest rates and impending inflation, traditional investment strategies might not suffice. Equity investment emerged as a viable option to hedge against inflation, especially considering equity remains a tax-efficient asset class in the current context.

Being intellectually curious enables us to capitalize on market cycles effectively. It’s essential to adapt swiftly to changing macroeconomic variables and policies. Rigidity in our views can hinder our ability to seize opportunities presented by evolving circumstances. Therefore, maintaining agility in our thinking and decision-making processes is paramount for success in dynamic markets.