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CFOs morph from guardians to strategists

Goola Warden
Goola Warden7/31/2017 08:00 AM GMT+08  • 4 min read
CFOs morph from guardians to strategists
(JULY 31): Andrew Lim, chief financial officer at CapitaLand, spent three hectic days at end-June to early July accompanying analysts and reporters on a tour of the group’s properties in China. With the group, he sampled the offerings of CapitaLand’s
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(JULY 31): Andrew Lim, chief financial officer at CapitaLand, spent three hectic days at end-June to early July accompanying analysts and reporters on a tour of the group’s properties in China. With the group, he sampled the offerings of CapitaLand’s F&B tenants, did some shopping and even tried out a flight simulator.

“It’s been very useful for me to spend three days with you and [obtain] your forthright and honest feedback,” he said at a briefing earlier this month. Lim’s objective is to ensure CapitaLand achieves a target return on equity (ROE) of 8% without overstretching its balance sheet. “We want to get to 8% sustainably at a run rate that meets our cost of equity,” he explains. He is aiming for about two-thirds of CapitaLand’s income to be recurring income and the remaining one-third from its “trading portfolio” of developments.

A former investment banker from HSBC, Lim sees his role at CapitaLand as being more than just ensuring the group has an efficient balance sheet and sufficient cash flow to meet its obligations. It is also about helping to steer the group into the right developments and investments. “When we look at the capital structure, it’s not what the balance sheet is now, or [what the] ROE or net debt is now, but [what] it would potentially be if we see something attractive. Those are the key things we want to be ready to be able to do, or to have the capital structure to be able to do it.”

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