30th July 2020 – Despite buoyant stock markets around the world, the COVID-19 crisis has spelled doom for many mid-cap firms that are unable to raise cash. Into this void steps Lam Ching Ching, CEO of Charismatic Capital, an investment firm focused on listed companies valued at under $1 billion. Charismatic has been able to secure impressive ROI injecting funds into cash-strapped firms across Asia.
Lam is Founder and Chief Investment Officer of Charismatic Capital, the investment manager to Charismatic Debt Equity Fund, a direct lender to shareholders of listed companies secured against their listed shares. The banking veteran boasts over two decades of a banking career with Citibank, Credit Industrial et Commercial, EFG and UBS. She climbed the corporate ladder to advise high net-worth clients on investments and credit, managing over USD1bn worth of assets.
Quality stocks selection
Lam started Charismatic Capital in 2015 when she noticed that listed companies with market capitalization below USD1b were underserved by banks. Banks had lost their lending appetite after the 2008 global financial crisis and to date, mainly focused on large and established corporations.
Concurrently, the ultra-low interest rate environment post-2008 made it difficult for investors to find attractive high yield-generating assets. With the Covid-19 pandemic, banks have become even more selective of borrowers.
Charismatic Capital thus provides stock loans to shareholders who pledge their shares as collateral. In return, its investors are compensated with attractive double-digit yields. Empowered by financial technology, it created a user-friendly online portal to streamline and accelerate the processing, allowing loan cases to be swiftly assessed and closely tracked. Investors can also access to its investments and their performance via the portal.
Tapping on her networks and expertise, Lam established a diversified portfolio of stock loans with over collateralization of stocks. She credits her years in banking for giving her a sharp eye in selecting quality stocks and doing in-depth credit assessment, resulting in two stellar years with a double-digit net return as expected, and zero rate of default by borrowers.
The future of Asian finance
In countries like Thailand, Indonesia, and Singapore, Lam foresees higher growth ahead over the next decade. Lam credits this positive outlook on the countries’ high domestic savings rates, good infrastructure, and stable political situations.
“Even with Hong Kong’s unstable political outlook, many US-listed companies with Chinese ownership have returned to dual list in Hong Kong, suggesting Hong Kong will continue to remain a leading financial hub,” She notes. This increase in variety of stocks to lend against bodes well for Charismatic Capital, as Hong Kong is their biggest market at 50%.
To aspiring women in the banking industry, the mother of four graduate children and the avid ballet dancer says, “The sky is the limit. Go all out to establish a successful banking career without compromising on building a family concurrently,” emphasizing the importance of being financially independent.