How Aashish P Sommaiyaa, the former CEO of Motilal Oswal AMC and now White Oak Capital deals with money in his personal and professional life
The Finance Story 'Money & Me series' features finance professionals who share their journey with Money. This is an initiative to learn from each other.
- Meet Aashish P Sommaiyaa, a chemical engineer, MBA and CEO of White Oak Capital Management, a leading investment management firm.
- His career as a finance professional began in 1999 when he was a management trainee, after which he worked in renowned companies.
- Managing money in equity investments has been the core foundation of his profession.
- As part of the Money & Me Series, Aashish shares how he deals with money in his personal and professional life.
As a chemical engineer, how did you end up in finance and investment?
When it was time to pick a career, I chose to become a chemical engineer with a specialisation in polymer science.
Essentially, I worked as a production engineer in a factory and earned a lot less as I was not extensively involved in IT.
I had a lot of family responsibility and was looking at better opportunities.
My inclination towards Finance was always present and, during engineering college, many of my roommates coincidentally had a keen interest in stock markets.
In fact, when I was in engineering college, the famous Mehta Scandal was the talk of the town and we used to religiously read The Economic Times and discuss stock markets. So, I was aware of the stock market and my curiosity increased.
I decided to do an MBA in Finance to further my career. With smart work and dedication, I graduated in Finance in 2000 and joined ICICI Prudential AMC selling Mutual Funds!
As an engineer who worked on the shop floor and transitioning to finance, all of this being left-brained and introverted, to say the least, was not easy.
I had a communication challenge in every sphere, from pitching to a B2B partner or client to public speaking and everything in between.
What really helped me is pushing through and becoming clear why I wanted to be in the capital markets. To fill the gap, I learnt a lot about the economy, communication, and markets.
Over the years, I interacted with (and influenced) thousands of investors and their advisors alike. In hindsight, the evolution of India’s savings and investment landscape from being state-defined to being market-determined overlapped my career trajectory and there was no turning back.
Fast forward, in January 2013, I was appointed as CEO of the Motilal Oswal AMC. In the January to March quarter of 2013, the AUM of Motilal Oswal AMC was merely INR 1300 crore, and during my span, it grew to over INR 42,000 crore.
In 2020, after a 7-year stint, I moved to White Oak Capital as its CEO.
I have to mention that I am not a big believer in being deliberate concerning career and business. In my opinion, I hustled until I hit upon something that would eventually work out in the future.
How did your upbringing shape your attitude towards money?
I grew up in a 1BHK house in Mumbai within a joint family spanning my father, his two brothers, and my grandparents.
My father worked in the State Bank of India but he passed away when I was 13 years old, compelling my mother and my elder sister to take over the responsibility of the family of three.
Early exposure to very tight financial circumstances and then the insecurity and uncertainty caused by my father’s demise created a huge fear of being financially vulnerable.
So, throughout my upbringing, capital was always a constraint and it gave me an inferiority complex. Therefore, making me relatively cautious of getting into a situation of scarcity.
Since your father’s demise and your relationship with money in the finance profession, what lessons have you learned the hard way concerning money?
The lessons I learnt are that I should not make assumptions when it comes to money, savings and investments.
I recommend being conservative when planning the future, stressing the importance of starting early to invest!
Lastly, I learnt that I should not go with the flow when investing. Flowing with evolving trends could lead to losses.
What does your investment portfolio look like today?
When I started my career as a Trainee at ICICI AMC in the year 1999, I remember from my salary I would buy and sell shares taking inputs from my seniors. Unfortunately, I lost money here.
It was a good learning experience however this made me realise that while working for an AMC that recommends its clients to invest in Mutual Funds why should I trade in direct shares? Isn’t it unfair to the clients?
So, since then I always put money where my clients do i.e MF and PMS.
Whatever I have achieved is because of equity and the stock market.
So, historically, my savings and investments have been 100% equity through Mutual Funds, but I have recently started diversifying into commercial real estate.
In case of any misfortune, I can sustain myself for six to twelve months without liquidating investments.
With my unwavering faith in the economy of India, I am willing to invest more in equities.
Are you an overspender?
In my opinion, wasteful expenditure is spending too much on something that is detrimental to my health.
For this reason, I always draw the line in the sand so I do not overspend on detrimental items.
If it is a positive motivator to the extent that it helps me reach for the good things in life, I see no harm in spending, no matter how much it costs. A long as it will be worth it.
In the past, I used to take most decisions hastily, incurring wasteful expenditure such as overstocking my wardrobe with clothes and my study area with books. But now I do avoid buying in a haste.
What is your biggest financial challenge/mistake?
As cliché as it may sound, my biggest financial mistake is:
- Starting late to invest
- Being financially undisciplined
- Lacking conscious planning
How do you manage your own finances today?
I have officially engaged a wealth and investment advisory firm for my family, and I have a separate advisor for taxation and insurance-related advice.
Today, I end up saving up to 50% of what I earn.
In your 21-year-old career, have you noticed any major differences in the investment industry in the last few years?
Of course, yes, and the major difference in people’s willingness to participate in capital markets.
More than willingness, the need to participate in capital markets has increased significantly.
When I was a management trainee, I witnessed the Reserve Bank of India issuing bonds at an 11% risk-free rate. When the interest rate was 11-12%, there was no need for mutual funds, portfolio management services, IPOs, or even private equity.
On the contrary, now there are chances of acquiring only a 5-6% interest rate on your principle. The structural decline in interest rates resulted in the adaptation of capital markets and the new generation of investors is increasingly allocating more to capital markets than previous generations.
Moreover, our capital market is advancing with digital adoption rising dramatically. Many investors are engaging in DIY practices.
Lastly, what money management advice would you like to give to our readers?
There are many opportunities ahead; the only setback is that the stakes are higher now.
The gaps between the haves and the have-nots are going to be wide. For example, in the 90s there was a fair amount of homogeneity. In the next twenty years, our per capita will be much different.
The current generation has the potential to see exponential growth but they must be aware and plan to keep in mind that human life expectancy will inch towards 100 years as we go along.
For now, be patient with the timing and process, while you prepare for the future that awaits. There is no better way to learn about money than actually using it and making those mistakes. Take chances and learn.
The American philosopher, F Scott Fitzgerald once said, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function”.
If you can function without drawing conclusions and passing judgments, then you can be a prolific equity investor.
Now It's Your Turn....
Have any questions for Aashish? Comment below and he will get back to you.