Perfecting the Art of Investing
Mr Ronald Tay, Ascott's Chief Investment Officer, talks about opening the door for the Company's entry into India and investing in things that matter to his heart
Issue: Sep 2011
43-year-old Mr Ronald Tay is tasked with spreading Ascott's hospitality into new and challenging markets
Mr Ronald Tay is a man with a mission and one who welcomes the challenge of chartering into the unknown.
Afterall, he is the man who has been tasked to lead Ascott's entry into a tough market like India. But understanding market conditions is undoubtedly Mr Tay's forte. He began his career in corporate banking with the then Bank of Tokyo-Mitsubishi, understanding his customers' business and their industries. "You need to understand the customers and their business models and strategies before you can package a financial solution that best suit their business needs," says Mr Tay, who graduated from the Nanyang Technological University, Singapore with a Bachelor's Degree in Business, majoring in banking and insurance.
Coincidentally, the bank had a focus on serving the real estate sector. Hence, companies like Pidemco Land and DBS Land were among his customers. "I guess that began my affiliation with the real estate world," he quips. From corporate banking, Mr Tay went into the Debt Capital Markets Division when he joined HSBC in 1997. In 2001, he joined CapitaLand Residential Limited (CRL), following the merger of DBS Land and Pidemco Land.
He spent the next three years working in Treasury in CRL and then moved on to become Senior Vice President (Finance and Investment) of CapitaLand Residential Singapore. In January 2007, he was appointed as the Deputy Chief Investment Officer of The Ascott Limited, before becoming Chief Investment Officer in August the same year.
Breaking New Frontiers
Mr Tay noted that his 10 years in CapitaLand had been full of opportunities and fulfilling. "My greatest personal satisfaction is seeing how CapitaLand has developed and evolved over the last decade. I remember when I first joined the Group in 2001, it was still a relatively Singapore-centric company even though it has started to do business in China and Australia. It's totally different now. The Group has grown many times in terms of size, market capitalisation and geographical diversification. And I am really glad that I had a small part to do with this exponential growth," Mr Tay adds humbly.
Mr Tay has also played vital roles in leading the Group to break new ground on several fronts.
"Against the backdrop of challenging market conditions between 2001-2005 such as the 9/11 terrorist attack, Iraq war and SARS, we had to think out of the box to raise funds to finance the construction of various residential projects in Singapore. We worked closely with various investment banks to structure the securitisation of pre-sales receivables for residential projects which were sold on deferred payment scheme," reveals Mr Tay.
He adds that while a lot of groundwork went into making this initiative viable, CapitaLand was able to do that due to Singapore's transparent and robust regulatory framework as well as CapitaLand's strong reputation. These securitisation deals were rated AAA by international rating agencies back then.
"The scheme was a cost effective way for CapitaLand to recycle capital and to fund the residential projects during those tough times. I am happy to be responsible for driving a number of those securitisation transactions. When the deals were launched into the market, they were all over subscribed. And I am very proud to say that all the investors got their money back," explains Mr Tay.
At Ascott, Mr Tay continues to break new frontiers. As the Chief Investment Officer, he has been overseeing the expansion of Ascott's serviced residence portfolio in existing and new markets through investments in properties, leases and management contracts. With a quickened pace to expand Ascott's serviced residence portfolio to 40,000 units by 2015, Mr Tay has been on the go leading the company into new markets such as India and the Gulf region.
"India is my most interesting and challenging market. We started in India in 2006 and signed our first deal then. But it is only this year that we will be opening the first property which we have invested in, Somerset Greenways Chennai. So it has been a five-year learning curve," says Mr Tay.
The 187-unit Somerset Greenway Chennai will be completed later this year
He reveals that one of Ascott's strategies going into a new market like India was to find a strong and reputable partner who understands its domestic market well. Unfortunately its local partner was affected by the financial crisis. "So we had to re-structure our investments and bought over four out of the five projects from our partner," he adds.
Of all the challenges facing Ascott in its ventures in India, Mr Tay puts its greatest challenge to a lack of transparency within the system. "India is a bureaucratic country and rules and regulations are opaque, so that has been our greatest challenge. The learning curve has been very steep for us. But I still believe that the medium to long-term potential of the Indian market is strong. The demand for a product like ours – a serviced apartment managed by an internationally recognised operator – is great. A lot of foreign direct investments are still flowing into the country and many expatriates are going there to work. So the demand for good class serviced apartments is high. The challenge is not to fill up the rooms; the challenge is to get the property open," he explains.
To overcome the challenge of transparency, Ascott is continually on the look out for a strong and reputable partner that shares its values and culture. Over the last two years, Ascott has built up its own local team and project development and management capabilities. "I think nothing beats taking over the wheel and driving the projects ourselves. So now we have our in-house team that comprises architects, engineers and project managers. We hire locals who have very strong skill sets and understand the local regulations so that they can drive the projects effectively," Mr Tay says.
And this strategy is bearing fruit. Its 187-unit Somerset Greenways Chennai will be completed later this year – fitted out with fully-equipped kitchens, separate living rooms complete with state-of-the-art home entertainment systems and extensive recreation facilities including an infinity swimming pool and outdoor Jacuzzi. When Somerset Greenways Chennai opens, it will add to Ascott's current fold of over 22,000 operating serviced apartment units in key cities of Asia Pacific, Europe and the Gulf region.
Investing in the Home Front
A devoted father and husband, Mr Tay treasures his time with his sons, Samuel and Timothy and wife, Kwai Fong
Being a busy, jet-setting executive, Mr Tay counts his blessings when it comes to the home front. "My wife stopped work the day I joined Ascott," he laughs.
"She was doing very well as an underwriter in an insurance company. For her to stop work and become a full-time homemaker was a big sacrifice. I'm very grateful to her for that."
But Mr Tay plays his part as well. With two school-going boys, aged nine and 12, he makes it a point not to travel over the weekends. "We have family time every Sunday night. For an hour, the four of us would gather in my bedroom and we would spend some time together. We would either play board games or watch movies. It is a time that is precious to me. My boys treasure it, too. Even during the exam period, they will ask for family time," beams Mr Tay.
Keeping up with his boys is a priority for Mr Tay. That's why he has taken up jogging. "My boys are into sports so I have to stay active to keep up with them," he laughs. Since taking to running, he has also completed two 10-kilometre runs this year.
The value of family bonding is strongly evident in Mr Tay. His elderly parents live with him. "My parents used to work very long hours. My father was a salesman while my mother worked as a hairdresser. Although we hardly had family time like the one I have with my children, I understand that they had to work very hard to provide for my sister and I. With them staying with me, I can also encourage family bonding between my children and their grandparents," says Mr Tay gratefully.
Investing in Lives
Besides family bonding and filial piety, he also encourages his boys to have a strong faith in God. It is his faith that inspires him in work and life. "I believe that if I inculcate the faith within my boys, I would have imparted the right values and built the right foundation. Hopefully, they will know how to differentiate between right and wrong when they are out there on their own," says Mr Tay candidly.
Mr Tay (first from left) has the knack of connecting with the boys under his charge and earning their respect even though he is a self-confessed disciplinarian
Mr Tay's belief and conviction also stemmed from his 10-year involvement with the Boys' Brigade in Rosyth Primary School. Mr Tay found investing in the lives of these young boys very rewarding.
Mr Tay (pictured second from right in the back row) counts investing in the young lives at the Boys' Brigade a personally fulfilling and worthy cause
"My 10 years with the Boys' Brigade were extremely fruitful. I would spend almost every Saturday morning with these nine to 12-year-old boys. The boys came from all walks of life, and some came from broken families. What was rewarding was the fact that I was part of this formative period of their lives and saw how the activities organised, such as visits to nursing homes and orphanages, helped them in their character development. So even after they have left the school, they came back to school to help out in the Boys' Brigade. They have also kept in touch with me. I hold this involvement very dearly and see this as my contribution back to society," he offers.
Unfortunately due to his hectic travelling schedule, his involvement with the Boys' Brigade is now on an ad-hoc basis. But as a man with a mission, it looks like Mr Ronald Tay will gamely charter into new grounds and continue to invest in his career, family and personal development.