2012 Hall of Fame

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Lim Chow Kiat April 19, 2012

President of GIC Asset Management

Member of group executive committee and head of China business group

Fixed Income Analysts Society

Hall of fame induction (by Jack Malvey)

Tonight, we celebrate one of our profession’s brightest stars, Chow Kiat Lim of the Government Investment Corporation of Singapore, by his induction into the Fixed Income Analyst Society’s hall of fame class of 2012.

Chow now holds the triple distinction of fittingly becoming our youngest, first international, and first SWF inductee into the hall of fame. Our hall of fame began 17 years ago with the induction of our profession’s living legend, Marty Leibowitz, whom we are delighted to see here tonight. In a nice symmetry, Marty’s also a member of GIC’s international advisory board.

Chow’s well-deserved honor recognizes his contributions to asset management in the credit, asset allocation, portfolio construction, and risk arenas as well as in helping define the modern practice of sovereign wealth fund management.

Our ever insightful hall of fame committee also could not pass up the chance to include our first genuine “auntie-killer,” a Singaporean term of esteem used affectionately by some of his colleagues to signify Chow’s great poise, good manners, and boyish good looks.

To more fully appreciate Chow’s success and knowing Chow shuns personal credit, we must set the context. Rooted in the first world nation of Singapore, home to the fourth largest capital market, most CFA’s per capita, and the world’s speediest border customs, GIC was founded in 1981 to preserve and enhance its reserve returns for the government on behalf of present and future generations. And they have succeeded.

Few financial organizations have accomplished as much in the past three decades. GIC justifiably has become recognized for its vision, intelligence, deep emphasis on knowledge and analytics, collegial-team-oriented culture, and its attention to detail. (In other words, most of us long-time sell-siders wouldn’t fit there). And indeed, no one other than GIC ever asked my old Lehman index team for duration and convexity calculations out to six decimal places.

Because of its success, GIC has become a global role model for the $10.5 trillion SWF industry, on its way to $20-$30 trillion over the next decade. GIC’s influence goes beyond SWFs, as many plan sponsors and endowments have closely studied and emulated the GIC model. Traditional asset managers also have benefitted by needing to improve their practices to meet GIC’s exacting criteria.

As one example of its innovation, GIC has adopted a 20-year horizon to generate returns over inflation. This novel objective, likely to be pursued by many, confers a decided advantage over the short-term emphasis of most organizations. GIC can take the risk of acquiring out-of-favor investments. And so far, GIC has handily bested its long-term benchmark, specifically by 4% in the latest disclosed fiscal year.

GIC’s “open, team culture” may be its greatest strength. For GIC has crafted an environment that “fosters learning and mentoring” and “strives to be always in time for the future.” Thinking back, some of my former colleagues in the 1980s were always in time for the past.

For two decades, Chow has played an ever-expanding role in GIC’s success.

Hailing from a large family in Johor, Malaysia, that owned a plantation, Chow’s schooling was in Singapore. He graduated with first class honors in accounting from Nanyang University in 1993, whose logo of four interlocking hands symbolizes serve, learn, grow, and lead. This foundational guidance has become a template for his career.

Rejecting job offers right out of university for higher compensation, Chow enlisted at GIC to learn. Chow initially was dispatched to master the credit field, starting first in money markets and then moving out the curve into corporate bonds. This was a difficult task in the 1990s, coming at a time when the torrent of new information and new products ignited a quickening evolution of the global credit markets.

Many were carried off the credit field on their shields during this tumultuous era. And not all of the fallen were relying upon my advice.

But Chow and his able colleagues at GIC, quickly combined a maserty of fundamental analysis with the latest credit quantitative techniques to optimize credit portfolio performance. Within a short period in the 1990s, he was viewed as consummate credit practitioner.

Recognizing his prodigious performance and his strong leadership, GIC promoted Chow into asset allocation to deploy his talents across multiple asset classes. By the early part of the last decade, he was well in front on the annointment of emerging markets as the asset class of choice for the early 21st century and possibly beyond.

Within only a decade of joining GIC, he was appointed in 2003 as head of the fixed income, currency, and commodities department.

Against the most trying backdrop for markets in eight decades and in further testimony to his talents, his career blossomed over the past five years.

In 2008, he was elevated to deputy president of GIC asset management. After a short tour in Europe starting in 2009 as president of GIC’s European operations and overseeing the Middle East and Africa, he returned to Singapore to join the group executive committee as the deputy group investment officer and president of GIC asset management, with additional responsibility for guiding his firm’s burgeoning investment in China.

Along this industrious road, he collected a CFA and graduated from Stanford’s executive program.

This trail of rapid promotions does not do to justice to the essence of Chow. According to colleagues, his great success owes much to his strong leadership, good humor, great humility, honorable conduct, positive outlook, and ability to bring teams together.

And like all great capital market operators, Chow possesses enormous curiosity that inspires a deep dedication to education and research. Indeed inside GIC, Chow’s known as something of an Oprah Winfrey with his informal book club. When Chow likes a book, especially on capital markets, he’ll often buy a hundred or so and distribute them internally.

Unfortunately, Chow’s practice has had unintended consequences. Apparently, some of his colleagues avoid buying new investment books, preferring to wait for Chow’s generosity.

We obtained a copy of Chow’s recent eclectic recommendations. All of these are out of print, which does not fully surprise given that all the authors are FIASI members. The titles include: “The ten thousandth book on the roots of the great recession: The unexplained contribution of the 19th century railroad indentures” by Marty Fridson; “Still missing: The search for the FIASI hall of fame’s physical location” by Keith Anderson, who thinks there is a good chance that Atlantis and Noah’s Ark will be found before the hall of fame; “The challenge of debt portfolio management in a world where the number of my books exceeds all outstanding debt securities” by Frank Fabozzi; and my own now less-than-classic, “Seasonality ad infinitum: Risk on early and late; fade in middle”.

We eagerly await Chow’s eventual classic.

In some ways, this “book-waiting” is a metaphor for the global asset management industry. None of us here tonight can fully predict the nature of our wonderful profession in 2025. But we can predict with confidence that GIC, with Chow, will play a leading role in designing and implementing a sturdier next generation global financial system, and that our wait will be brief.

In professional sports, induction into the hall of fame typically follows the end of a career. Nothing could be further from the truth for Chow. The best of his contributions to our vital global capital market industry is ahead, especially his adventures and leadership in investing in China.

Chow, our profession already has been enriched by your outstanding contributions. May the next phase of your wonderful career be even more illustrious!

To quote one of your colleagues and perhaps to bestow the ultimate compliment: “Nice guys really do finish first!” And they also get elected to the hall of fame!

So on behalf of all of us here this evening, welcome, Chow Kiat Lim to the FIASI hall of fame.

Please all join in a rousing cheer for this remarkable young man.