Mastering the nuts and bolts of investment

Mastering the nuts and bolts of investment

Vasin Vanichvoranun cut his teeth as an automotive engineer before shifting gears into corporate finance and asset management. By Nuntawun Polkuamdee

Vasin Vanichvoranun, KAsset executive chairman.
Vasin Vanichvoranun, KAsset executive chairman.

From the basics of engineering studies at King Mongkut's Institute of Technology Ladkrabang to extending his education with an MBA at Chulalongkorn University's Sasin Graduate Institute, Vasin Vanichvoranun has successfully chased his dream of becoming a fund manager and now oversees the whole investment industry from a bird's-eye view.

Mr Vasin, 54, is executive chairman of Kasikorn Asset Management (KAsset) and chairman of the Association of Investment Management Companies (AIMC).

Although his first job was as an engineer at Siam Toyota Manufacturing Co Ltd, his career path later drifted towards the realm of finance. As an investment banker working for Peregrine Finance and Securities, Mr Vasin was tasked with assessing the assets and capabilities of electricity projects before bringing the relevant companies to list on the stock exchange.

Life took a turn again as Mr Vasin accepted a job in the real sector, working in the electrical power field at Sahacogen Chonburi as an asset manager. Such work required both engineering and financial knowledge in assessing electrical and energy projects. The job also allowed him to get to know Kasikornbank's top executives, as KBank was a project lender and inspired further interest in the field of asset management.

An opportunity to work at KBank, overseeing the multi-corporate banking department, presented itself in 2003. During his seven-year stint at the bank, Mr Vasin was ultimately promoted to executive vice-president for the business corporate division in 2010 before being named executive chairman of KAsset in 2015.

KAsset has assets under management (AUM) worth 1.35 trillion baht, the second-highest figure in the sector (trailing SCB Asset Management's 1.5 trillion baht). The value includes 995.5 billion baht in mutual fund business, 180.6 billion baht in provident fund business and 174.8 billion baht in private fund business.

KAsset has the highest market share (21.8%) in the mutual fund industry.

LONG-TERM MISSION

In the world of fund managers, the pace of work and the mindset can be compared to that of a smart watch with many functions. It is a watch that can catch a pulse, a heartbeat, and tell us how we need to improve our balance.

Although the domestic stock market has a market capitalisation of 14 trillion baht, with the portion of retail investors making up nearly 50% out of total investor groups, Thailand, in Mr Vasin's own words, still has barriers in the world of investment and mutual funds.

The problem is that there remains minimal access to the capital market for the population of nearly 70 million. About 1.5 million people are investing through mutual funds, a small amount compared with the total population.

The majority of people may have little access to financial knowledge and understanding, or they may invest too little, or they may lack the confidence to invest at all, Mr Vasin says.

"This is a challenge, and a long-term mission of the mutual fund industry is how to expand the investor base at a greater depth," he says.

As chairman of the AIMC, Mr Vasin says the mission must be continued in terms of financial literacy and financial practices to familiarise people with the concept of investment.

As individuals become more experienced, greater investment risk exposure can be made -- but only when a sound understanding is already in place.

Mr Vasin keeps fit by jogging, cycling and entering marathon events.

"We now develop tools and investment access more easily through technology," Mr Vasin says. "The platform should have a chance to reach the target group easier than in the past. There are also various types of funds to meet various needs and levels of risk acceptance."

As there are many challenges presenting themselves in the world of investment, the main task for fund managers is to satisfy clients' needs. Mr Vasin specifies three main objectives that must be addressed: "These are winning the benchmark, winning over competitors and winning customers' trust."

Winning customers' trust is important because this will make them invest with the company on a long-term basis. One of the key points is to take good care of clients and establish good after-sale service, with timely management and a forward-looking perspective, Mr Vasin says.

"If you see that there will definitely be problems in the future, the question is how do we fix these problems or prevent them from happening, while ensuring customers don't panic," he says.

MAJOR REDEMPTION

A recent challenge presented itself for Mr Vasin against the backdrop of the coronavirus crisis. The challenge was the approach in dealing with the two fixed-income funds of TMBAM Eastspring, a catalyst igniting a major redemption in Thailand's mutual fund industry to the point where the selling spree nearly sparked a liquidity crunch.

A staggering 88.3 billion baht worth of AUM was lost for these two funds from March 11 to 25 on the back of a selling spree of fund units over concerns about the virus outbreak.

In the bigger picture, net sales of Thai bonds by asset management firms totalled 35 billion baht on March 20 and 30.5 billion baht on March 27, according to data from the Thai Bond Market Association.

Local financial authorities, namely the Finance Ministry, the Bank of Thailand and the Securities and Exchange Commission, on March 22 issued urgent measures to address the liquidity problem in the mutual fund industry.

"At that time, we saw that the situation could spill over and might cause a massive redemption from fixed-income funds in the system," Mr Vasin says. "The situation was later resolved when the Bank of Thailand announced the setting up of a 400-billion-baht Corporate Bond Stabilisation Fund (BSF)."

The fund is a vehicle to provide bridge financing to high-quality firms with bonds maturing during 2020-21.

"But eventually TMBAM Eastspring had to close four fixed-income funds with total AUM of approximately 200 billion baht and aggressive redemption of funds," Mr Vasin says. "The situation also resulted in redemptions of investment units in fixed-income funds in the system worth around 200 billion baht."

Although the Covid-19 outbreak in Thailand has subsided, all stakeholders must keep their guard up because there are concerns looming over a second outbreak, Mr Vasin warns.

"Investment in risk-weighted assets still requires high caution, while low-risk assets still offer low returns," he says. "We should reach satisfaction and accept the appropriate risk from customers."

LOOKING BACK AND AHEAD

Mr Vasin reminisces on a valuable experience in problem-solving skills taught by a former superior at Siam Toyota Manufacturing, a lesson that endures in his work philosophy today.

"I made a mistake once," he says. "Engine oil was depleted so the machine could not work. My boss asked me how I would solve the problem, and I responded very simply that the engine oil had to be refilled. But the boss said 'No, how would you prevent this from happening again in the future.' This was a valuable lesson for me to not only manage yesterday, but manage tomorrow as well."

Additionally, his former boss taught him that products must always be manufactured to meet the needs of customers on a just-in-time basis to ensure minimal waste of stock.

In essence, looking ahead for opportunities and mitigating potential risks form the core of Mr Vasin's work philosophy.

As a tower of strength for his wife and three children, Mr Vasin saw his relentless work efforts and long hours translate to deteriorating health and weight gain.

"A doctor asked me if I made a lot of money and did I have someone to look after," he says. "Basically, the point was that if I continued to disregard my health, the money that I made would have to be used to treat various diseases that came with obesity."

Since then, Mr Vasin has shed 20kg over several years through exercise like cycling and jogging. Eating a good diet is another key factor in his improved health.

"I have not neglected the importance of exercising since," he says. "I will always try to participate in marathon events hosted by KBank."


BIO DATA

Vasin Vanichvoranun
Age: 54


EDUCATION
- Bachelor of Mechanical Engineering, King Mongkut’s Institute of Technology Ladkrabang
- Master of Business Administration, concentration in finance and marketing, Sasin Graduate Institute of Business Administration

CAREER
- 2015-present: Executive chairman, Kasikorn Asset Management
- 2015-present: Executive vice-president, Kasikornbank
- 2010-14: Executive vice-president, corporate business division, Kasikornbank
- 2008-09: First senior vice-president, corporate business division, Kasikornbank
- 2006-07: Senior vice-president, multi-corporate banking department, Kasikornbank
- 2004-05: First vice-president, multi-corporate banking department, Kasikornbank
- 2003: Vice-president, multi-corporate banking department, Kasikornbank
- 1997-2003: Senior asset manager, Covanta Energy Co Ltd
- 1995-96: Investment banker, Peregrine Finance and Securities and SCF Finance and Securities
- 1991-93: Engineer, Siam Toyota Manufacturing Co Ltd

FAMILY
- Married with three children

HOBBIES
- Exercising


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