Wealthy and pragmatic

 

Thursday, Jul 03, 2014

Wealth Magazine by The Business Times

BY any private banker's reckoning, he is ultra wealthy. But Liew Mun Leong has this to say of his wealth: "I never think of wealth as anything that is important in my life. I always tell people I never think of becoming a CEO, I never think of becoming a millionaire in my life. I think of survival."

Indeed, he tells Wealth in a recent interview at his Changi Airport Group (CAG) office where he is chairman: "As long as I can survive and live reasonably well, and loved ones are attended to, that is enough for me. I never take wealth as a driving force in my life, never. Once you are driven too much by wealth, you may not be a wholesome person."

Ironic words from someone who set a record for being the highest paid chief executive officer in corporate Singapore when his salary in 2007 topped $20 million for helping CapitaLand rake in net profits of $2.76 billion that year. That record is still unbroken.

"If I have $10 million or $20 million, what's the difference? In my whole life I've only had one car. A lot of people in my position will have three, four or five cars, but I only have one car and the purpose is to take me from point A to B. I can get a good car, I've a BMW, but I only have one."

He shares that he has the same pared down approach to his home: "I live in a semi-D. My architect tells me you can go and buy 25,000 square feet of land and build a big bungalow. But why do I need a big bungalow? I don't see value in it, I don't see any motivation because I'm happy where I am."

He says half-seriously that there is another reason for not moving: "I've stayed there since the early 1990s, I've grown professionally, I've been successful as a business person, my family has been good, there is some fengshui effect. In fact, some of my people said 'Don't sell it, boss. If you move, CapitaLand may be affected!'"

Superstition, but perhaps not entirely without reason. When Mr Liew became CapitaLand CEO in the year 2000, following the merger of the former Pidemco Land and listed DBS Land, the group's market capitalisation was $8.9 billion.

Twelve years later when he stepped down, the market capitalisation was $44.5 billion.

"So I created $35 billion of wealth to shareholders," he says with some pride. Among these shareholders are his former CapitaLand colleagues. At one point several years ago, there were about 600 millionaires in the group, all made wealthy by their share options.

The steep rise in CapitaLand's share price in its earlier years also helped create a very loyal following among retail investors. CapitaLand's share price peaked at $8.60 in end-April 2007.

But Mr Liew has his detractors, of course, especially after his handsome bonus in 2007 was made public. He is acutely aware of this, and so throughout the interview refuses to disclose his total net worth, saying in a somewhat self-deprecating manner that he is just a "hired gun" and not an entrepreneur. His net worth, he says, cannot be compared to some of the most successful businessmen in Singapore.

He does, however, share details about his investment strategy: He is a conservative investor and his focus is on wealth preservation. Half his assets comprises largely property and fixed income products such as bonds which have real estate as underlying assets. The other half is in cash, poised for investment opportunities along the way.

"I have two private bankers, DBS and StanChart. But to be very frank with you, I'm not big in shares and all that. My private banker is actually just to help me keep track of my accounts. If I ever go into the market, it's more bonds. I'm not at all involved actively in equity investment. Very little."

He says that he is not a fan of equities because share prices are influenced not by the performance of the company per se, but by global events. So if, for instance, Wall Street drops, chances are the company's share price will too regardless of how fundamentally sound it is.

He also has an aversion to unit trusts, saying: "If I want to fire crackers, I may as well fire them myself!"

He does, however, put his money in real estate investment trusts and has invested in all of CapitaLand's Reits. His biggest bet by far is on real estate.

The bulk of his portfolio is in Singapore, but of late he has invested in Japan properties, buying several within the past year. He dismisses the London, UK market as too speculative, and China, a previous favourite, has also taken a backseat after he cashed out on his earlier investments.

Japan, he says, has strong fundamentals, the rental market is good with many local Japanese preferring to rent rather than own their homes, and there is upside potential. "You know for sure it will not drop so badly," he says. "Properties in Tokyo are cheaper than Singapore. For $1,000 per square foot I can buy in Tokyo Bay and it's freehold... For $1,000 psf, you can never get freehold in Singapore. Choa Chu Kang is $1,100, $1,200 now," he explains.

One other area Mr Liew takes a keen interest in is restaurants. "I like to do direct investments, so I invest in restaurants." He has minority stakes - "never more than 20 per cent" - in three Japanese restaurants (one each in Clarke Quay, the Esplanade, and Marina Bay Financial Centre), Colours By the Bay at the Esplanade, a gallery restaurant called 7Adam along Adam Road, and recently brought to Singapore the famed Hong Kong dim sum chain called Tim Ho Wan. The chain now has four restaurants, one each in Plaza Singapura, Toa Payoh, Westgate in Jurong and Bedok Mall.

He is also passionate about collecting art. In fact 7Adam, with its black and white bungalow setting, is more a gallery than a restaurant. He declines to give precise figures, but admits that he has to date spent millions of dollars on his art pieces.

He modestly describes his collection as "so minuscule that it's not interesting". His collection comprises mainly contemporary art and some works by top Chinese artists such as Han Meilin, recognised for his creation of the Fuwa dolls, mascots for the 2008 Beijing Olympics.

Where does he keep his collection? "I keep them here (in his CAG office), I've arts in Surbana, and I'm going to put some in Pavilion Gas. I also give some to my children," says Mr Liew.

He is chairman of both Surbana International Consultants, and Pavilion Gas, set up recently by Temasek Holdings to run downstream gas operations in Singapore and to distribute and trade in liquefied natural gas regionally. He has a son and two daughters, all of whom are married.

So strong is Mr Liew's passion for art that he makes trips to visit artists in their homes. "Every time I go on overseas trips, if I've the time, I go to the galleries. I not only go to galleries, I go to the artists' homes and I can spend the whole afternoon with them. The artists feel very proud if you do that with them."

At the rate he's going, despite his protest that he is only a small player - "I don't buy them for trading, I buy them for ownership" - it'll be hardly surprising if art eventually becomes one of the core themes in Mr Liew's investment strategy.

Building CVs for companies

Far from taking things at a more relaxed pace, former CapitaLand chief executive Liew Mun Leong keeps a busy schedule holding down multiple portfolios in areas as diverse as airport development and liquefied natural gas trading. But his personal mission in the immediate 10 to 15 years is to groom talent for the next generation of corporate leaders. He calls it "growing fruits on other people's trees", a phrase borrowed from a book entitled Finishing Well by Bob Buford.

"I'm not going to work for myself, not going to continue making money for others and myself. All that I'm doing is training companies, grooming young CEOs and imparting ethical values to the companies," he says in a recent interview with Wealth.

He elaborates: "I'm entering the next career stage, and this career stage is what I call NIE or 'not in employment'. This NIE career path is the last runway we'll have in our career. It might be 10 to 15 years, depending on how long we can carry on. So what do I do in this last phase of my career?"

The way he sees it, he should be building capabilities in the companies he's still actively involved in, somewhat similar to what he did in CapitaLand. "My next role is to bring capabilities and value systems to companies. So in short, I'm building CVs for companies - capabilities and values can be abbreviated as CVs," he says.

And he is well placed to do that. Mr Liew, who turns 68 this year, is currently chairman of the Changi Airport Group (CAG), Surbana International Consultants and Pavilion Gas. Or, as he puts it, "active non-executive chairman".

"If you're chairman, you're chairman. You are responsible... I cannot be a paper chairman, just sign board papers. That won't thrill me. I'll die in the job!" he says. The three portfolios take up 70 per cent of his time. CAG is in the initial phase of a 1,000 hectare development which Mr Liew calls "the second Changi". It is a job which he cherishes, having played a role as the engineer for the first runway of the original Changi Airport.

In Surbana International Consultants, Mr Liew says that his plan is to "build it into the largest and leading building professional firm in this part of the world". "We are going beyond housing into commercial; and we are going into airport development, going into healthcare, going into reclamation, and we even have ambitions to go into underground rock caverns," he says. Both the CAG and Surbana CEOs are in their early 40s so "it's ideal for me to be able to help them along the way", says Mr Liew.

Pavilion Gas, an entirely new company under Temasek Holdings, aims to make sure Singapore is strategically energy sufficient, and an energy hub in this part of the world, he says.

Apart from these three key portfolios, Mr Liew is also active as a board member on the Singapore Exchange; sits on the advisory board of the Hong Kong-based Fung family's business called Fung Retail; and is provost's chair professor (practice) at the National University of Singapore's business school and the engineering faculty. When he has a spare moment, he delivers lectures to staff of overseas developers such as Sun Hung Kai at their invitation.

With such a full plate, retirement does not figure in Mr Liew's plans. Asked what he would like to be doing five years from now, he says: "I would still like to be driving Changi the whole (development) programme will finish in 2025. I still hope to be able to guide them in Changi, Surbana and Pavilion Gas. I hope that I can continue to do useful work in the university, not just forum lecturing but connect the university to the industry. There's a lot of talent that can be harnessed to work in the industry. Every day I see opportunity."

This article was first published in the March 2014 issue of Wealth.