Ajith Fernando: Making a difference as a business leader and cycling enthusiast

Ajith Fernando, the Managing Director of CAL, is a business leader whose knack for finance and love for cycling have enabled him to make a significant contribution to the corporate arena, and society at large. 

Calm, collected and jovial, Fernando’s carefree attitude and unwavering faith in people, has played a crucial role in helping Capital Alliance (CAL) rise to become a market leader in Sri Lanka’s financial services industry. He has also been a driving force in the ‘Around the Pearl’ initiative, a fundraising bicycle ride around the island that strives to raise funds to support children with cerebral palsy. 

CAL Managing Director Ajith Fernando

Back to the beginning

In the 1980s, Fernando was an engineering student at the University of Katubedda, when due to the political turmoil of the time, he left university and started his professional career. 

He joined George Steuart as a money broker and explored into the government securities market when it was first starting to develop in Sri Lanka. He thereafter worked for Vanik Incorporation, where he learnt about the various aspects of running a business and developed a strong entrepreneurial spirit. 

A poolside chat leads to a multi-billion rupee company

In 2000, Fernando was having a casual poolside chat with Asanga Seneviratne who was heading Asia Capital at the time, and Fernando simply shared his idea about starting CAL.

Jokingly, Fernando stated, “It wasn’t a well-planned effort, I didn’t think too much about it at the time, I just ran the idea by Asanga and he immediately agreed to fund the company, and so in 2000, CAL was founded as a primary dealer in Government securities. When Asanga left Asia Capital, we were able to buy back most of our shares and maintain our ownership. Along the way, we started a stock broking and asset management company and set up an investment banking unit, and we also acquired an existing tea broking company. We bought the latter for just Rs. 10 million, and today it is valued at Rs. 600 million. CAL has today, established market leadership positions in all its business areas due to its client centric approach to financial solutions

The need to evolve over time

Commenting on how CAL has evolved with the times, to secure its position as a leader in the financial services industry, Fernando stated: “I always tell our team, that at any given time, we’re just two years away from irrelevance. We started off as a niche player and kept a low profile, along the way, we grew in size and became more established. We are always looking for new ways to strengthen and differentiate our offering. Government securities is an area that’s particularly cyclical and we soon realised that even though we could benefit from significant profit gains by focusing on one product, in order to stay relevant, we would need to branch out and diversify, and so we started our stockbroking unit as well. Our stockbroking unit tied up with a US based distributor and that gave us a strong foreign backing. At the time, we considered rolling out a stockbroking branch network, but decided to capitalise on the potential of internet based retail instead. We also received valuable input from Brad West, the Founder/CEO of Amba Research, who had also handled emerging markets at Deutsche Bank. He helped us take on a more progressive outlook. Whilst many companies saw compliance as a cost, Brad helped us to capitalise on it and use it to our advantage as a marketing tool. Under his guidance we managed to strengthen the compliance and security aspects of our operation, and we started paying attention to the small things, like the recording of mobile phone conversations and security screenings to control who could enter the office. We started adhering to the best standards of compliance and security, ahead of other companies and as a result we were recognised as a company that ran its operations differently – and protected the interests of its clients.”

A belief in building people

Fernando’s outlook on developing people, is refreshing and has helped him retain an incredible team of professionals. 

Commenting on the importance of building people, he stated, “In the investment and finance sector, all you have is a reputation, a balance sheet and your people. In a nutshell you are only as good as your people and so I have always focused on building and empowering the CAL team. I always tell my senior management to hire people who are smarter than them. If you don’t have anyone smarter than you working under you, then it’s difficult to succeed. Having smarter people on your team, is what helps the entire unit to grow and reach new heights. I also feel that it’s important to give people the freedom they need to do their jobs, I’ve taken a back seat at the business now, and I trust my team to do the needful to take the company forward.”

Last year, as part of its retention strategy, CAL provided its employees with company shares, and Fernando believes that by gradually making employees owners of the company, they will be able to invest more and simultaneously gain more from the business. He commends CAL’s employees as being an absolutely fabulous team, who receive bigger and better offers each day, but have found a place at CAL where they can excel, without being bogged down by hierarchies or bias. 

CAL is completely committed to a policy of inclusivity and regardless of their ethnicity, religion, education or background, anyone can build a career at CAL, and as long as they perform, they will be able to rise up the ranks and achieve success. 

The importance of stepping back with dignity

In CAL’s 10th year of operations, Fernando split the company, with one division focusing on government securities and proprietary trading and another focusing on client facing activities such as M&A, asset management and stock broking. 

He realised that in order to add new ideas and grow the company, he needed to take a back seat and let his team bring in new ideas and innovation. He has handed over the operational management of each business to its respective CEO, and he has learnt to step back gracefully. He is still however involved in developing customer relationships and strategic planning initiatives at CAL. 

Buying, selling and growing

Addressing a misconception about CAL, Fernando stated, “Many people believe that CAL buys and sells businesses; we’ve only ever sold two companies in our history. The first was our money broking company which was too small and messy, so we sold it to the employees of the business itself. The second was our finance company, which we had to sell due to pressures from the Central bank at that time. Our principal company CAL has achieved consistent growth and is continuing to provide our clients with exceptional returns.”

Achievements and proud moments

Highlighting some of CAL’s biggest achievements, Fernando said: “I am extremely proud of our asset management unit, which has grown into the largest unit trust management company in the country in a relatively short period of time. We changed the game in this area, everyone else created unit trusts and then went to the market with various products and offerings. Our approach was totally different and in reverse. We went to different investors and asked them what they wanted and needed, as a result we were able to create totally customised products that were based entirely on investor needs. We currently handle 11 unit trusts with a total asset base which is valued at c. Rs. 40 billion. This has given us the strength required to market our offering to others.”

Investing in research and relationships

When Fernando decided to invest in research, he recollects how many people in the industry condemned it to be a waste of time. Proving them wrong, Fernando says, “It is our strong research unit which has helped us to build credibility and has provided us with valuable access to corporates. Our research has enabled us to build important relationships and add value to our offering.”

Additionally the relationships which Fernando and the CAL team have built with clients, regulators and stakeholders have also played an important role in the company’s progress. Often regulators contact CAL for the team’s input on market related matters, and being able to provide guidance and support for the industry at large is something that Fernando is immensely proud of. 

Having a first-mover advantage

Fernando reiterates that picking up on trends early and positioning yourself to be there when a market or industry is about to take off, really does help you gain a competitive first-mover advantage. 

As an example, Fernando highlights how CAL entered into the stockbroking market early, and only paid Rs. 25 million for its license, whilst many other companies ended up paying up to Rs. 200 million for a license because they didn’t identify the potential in stockbroking early on. Many of Fernando’s successes, even the inception of CAL, can be attributed to delving into a market, capitalising on a trend, or seizing an opportunity at the right time. 

An outdoor enthusiast and cyclist on a mission

Fernando has always been passionate about outdoor activities, and has been an avid scuba diver and mountain biker for many years. He developed an interest in road cycling by accident when he met Yasas Hewage during a roadside breakdown. Hewage lent Fernando his road bike, and his new hobby took off. Whilst he doesn’t cycle for fitness reasons, Fernando acknowledges that there are many by-products of cycling which promote overall health and well-being. For him, long solo rides are meditative and give him some time alone.

“There’s something very peaceful about watching the wheels of a bicycle turn,” says Fernando, “Cycling is almost like a form of mediation for me, it helps me detach from any worries or problems and I can just relax and take in my surroundings. When you travel by car, you’re an observer, but when you cycle, you can truly be a part of the journey. When you cycle, you get the good and bad smells, sights and sounds, the amazing vistas, you feel the wind and change in terrain. Cycling helps you to truly experience your surroundings and people are also very receptive to someone on a bicycle. You connect with people more and they can relate to you better.”

Fernando believes that cycling has given him a more relaxed approach to life, where artificial deadlines and problems matter less. He recently cycled to Yala in 12.5 hours and is planning to ride to Jaffna in the near future as well. 

How trying to dodge a party led to the creation of ‘Around the Pearl’

A series of co-incidences are behind the ‘Around the Pearl’ initiative, which has now grown into a professional annual event.

Commenting on how ATP started, Fernando said: “I was turning 50 that year and I didn’t want to have the same old snazzy birthday party that everyone else was having. I thought I’d just get on a bike and ride around the country instead. I mentioned it to Yasas, and before I could say anything else, he said he’d join me. Then I mentioned it to another friend, Sarinda Unamboowe, and he agreed to join as well. I then met Ranil de Silva, and he asked me if I knew any fundraising project that would be able to partner with the Cerebral Palsy Lanka Foundation (CPLF), which was run by Gopi Kitnasamay. CPLF was in need of funds at the time and also needed to create more awareness about cerebral palsy. At that moment everything clicked, we decided that we would ride around the country, but we would do it to raise awareness and funds for children suffering from cerebral palsy. In the first year of the event, we put together the ‘Wheels for Wheels’ initiative and set out to raise funds for 1,000 wheelchairs for children with CP, in the following year we simply tried to raise as much as possible to support the work of the Cerebral Palsy Lanka Foundation.”

The ripple effect created by ATP

The ‘Around the Pearl’ initiative helped to create an enormous amount of awareness about cerebral palsy. 

Commenting on this, Fernando stated, “I have an understanding of the disorder because my daughter has cerebral palsy, but she is one of the lucky few who has a good quality of life and is really thriving. When we travelled across the country, we realised that many parents don’t know how to care for children with different degrees of cerebral palsy, and as a result they live very isolated lives. We found that many children were simply kept in rooms all day because their parents couldn’t afford a wheelchair. The awareness that the ‘Around the Pearl’ initiative created helped to really shine a light on cerebral palsy, and it highlighted the importance of providing children who suffer from the disorder with a good quality of life. The funds raised in the second year of the ATP initiative is helping Gopi Kitnasamay run specialised camps across the country, which will provide children affected by the disorder, and their parents with health checks, support and assistance.”

Highlighting his philosophy in a nutshell, Fernando states, “I don’t believe in half measures, after all anything worth doing is worth doing in excess. Life is full ups and downs, and whether you’re facing immense success or a tough time, it’s always important to remember that all things eventually pass.”

Fernando has been the Managing Director of CAL since the company was established in 2000, as a leading player in the financial markets of Sri Lanka. The company specialises in the origination, trading and investment of debt and equity securities and this mix of expertise and services allows CAL to offer integrated and customised solutions to its customers across the entire financial spectrum.