Mohit Ralhan: Leveraging Years Of Wisdom To Drive Exponential Growth For Customers
Mohit Ralhan
Chief Investment Officer
An industry veteran with over two decades of experience in Fund Management and Consulting, Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW Private Equity is specialized in Buyouts, Margin Expansion and Turnaround situations. Prior to TIW, Mohit has worked as an Investment & Operating professional at Baring Private Equity Partners India Fund II and Fund III. He has served on advisory board of companies in the interest-rate sensitive sectors, FMCG, Technology, Education, Consumption, Media, Digital Businesses, Real Estate and Manufacturing Consumption. Awarded by the Times Group as the 'Most Promising Business Leaders of Asia' for recent two consecutive years in 2019 & 2020 for demonstrating exemplary leadership qualities, Mohit is vesting his years of knowledge and experience to steer TIW Private Equity towards greater heights.
In this one-on-one interaction with CEO Insights, Mohit highlights upon his professional journey and how he is leveraging his skills to strategize greater things for TIW.
Tell us about your educational and professional background prior to TIW Private Equity. How has been your professional experience helping you in business operations.
Being an Engineer in Electronics and Communication in terms of education, my technical knowledge has played a major role in helping me through several aspects. From understanding the analytical side of businessto everything operational. Post my bachelors, I also pursued my MBA in finance, which has been a game changer, allowing me to have multidimensional experience with me working in consulting firms and private equity. Over the years, I have worked with many companies in various capacities across specially focusing on FMCG, Technology, Education, Consumption, Media, Digital Businesses, Real Estate and Manufacturing Consumption. In terms of the learnings, the most important learning typically came from managing portfolios during economic downturns. Recessions teach a lot, and it obviously helped equip me with the ability to understand how to navigate my way through the hard times, innovate, and transform business models.
I think the most important thing I'll say is that in my professional career spanning almost two decades now, I've seen six funds, multiple businesses and invested almost $250 million in companies with specialization in margin expansion and a turnaround of zero percent loss ratio at fund level. We can have bad companies and good companies, returns can be high or low, but I've never lost money at fund level. As a fund manager, I have repeatedly demonstrated success in judgment, managing funds, portfolio management, business strategy and more. Obviously, this comes from the ability to understand the process with good analytical skills and exceptional communication, presentation, and mentoring skills.
How has your industry experience helped you in performing your responsibilities at TIW Private Equity? According to you, which are the most crucial leadership skills that you've learned over the years.
I have been a part of multiple funds and investment committees managed by TIW. We have three different Buyout funds, and I'm leading the Investment Committee on each of these. I'm also typically on the Advisory Board of almost majority of the companies we invest in, as either independent director, or as basically Board Advisor. Additionally, most importantly, as a successful and modern CIO, it is essential to see the needs and be adept in managing multiple roles. So, one thing is, over the years I have got access to the ecosystem and as you grow, you feel yourself becoming a part of this ecosystem, and especially at that senior level, the nuance of guiding the ecosystem is equally important.
If you don't make the right decision, you tend to stall in terms of growth. Choices are important. I think overall, it is essential to be fairly open minded because of what social media has done at large. To add to this, it is essential to rise
from failures. You all talk about successes, but let's talk about failures that led to success. Case in point is, look at Steve Jobs; how many times he failed before finally ending-up at the top. Secondly, good listening skills. People have very poor listening skills today. They always believe they're right and that they know everything. So, I think it's important to be a good listener. Also, the more you grow in the hierarchy, the more critical it is to be a good listener. It's very intuitive and important. So, to me, these two strengths ability to rise from failures and listening skills - are extremely critical into today's world.
As a Chief Investment Officer, what are the strategies that you put forward to align your organization with your vision and mission? How do you ensure great values are instilled at TIW Private Equity?
While innovation is important, there is a difference betweenradical and incremental; to create alignment, to create success. I think it is important to have incremental innovation. Life is not always about radical. Consistent innovation is the key! So, if you have to see in terms of adding value to organizations, the most important aspect is to differentiate between the kind of innovation you want to drive. Today, organizations need innovation; it is a no brainer, but is it radical innovation or incremental innovation? While I'm in good and radical line because of the people I'm dealing with, there are certain areas of business where it has to be incrementally driven rather than radically driven.
I believe, it's important to have acceptance of policies. So, simple things like innovation, business model, strategy, sales & marketing, HR processes and supply chain play a key role in making the business more efficient and productive. I think it is important to drive incremental innovation because when you drive incremental innovation, you're able to correlate the management team and the hierarchy. Also, the company and employee force at large is able to see that there is a continuum from point A to point B, and it's not disruptive; so then they become part of the change as change agents.
Another thing is that it is very important in today's world to focus on topics such as cost leadership, what has globalization done, augmentation of online, do foreign companies get into India or any country? As companies, I believe it is always important to be on our toes, because if we are not, then somebody else is going to take away the market share. In that context, one of the best ways to drive success and create long term value is to drive cost leadership, because there is no parallel to that. Having cost leadership, you can compete with anybody. In bigger companies, the decision making can be far more bureaucratic, and empowerment is less, but in smaller companies, they can be fairly fast in decision making and empowerment is high. Hence, the need of the hour is to drive cost leadership and incremental innovation in every horizontal of the organization one should drive incremental change to add value to the organization.
How do you integrate the consideration and management of risk in the setting of strategy, achievement of goals& objectives, optimization of performance, and management of major projects?
When we begin with a customer, we typically evaluate performance, starting with margins, as they are a big indicator of the organization and setting. While it's an outcome, it is an effect of all the causes such as technology, augmentation and a particular vertical. If an organization is showing improvement in margins, they must be doing something right on the input side. So, the most important aspect from a company's perspective is definitely margins. Another thing I personally believe as a big barometer of future success is the attrition rate of an organization. Be it any company, if the attrition rate is low and if people continue to like working in the organization, eventually their productivity will go up. As they continue to work in the same setup, their understanding of systems, processes, product, or whatever service they're offering tends to move up and leads to higher productivity. So, the most important aspect to look at from a risk mitigation perspective is the risk of people and risk of capital. I can see many, but it is the risk of people in capitals and organizations that should not keep burning capital. Hence, focus on margins! Organizations should not keep losing people, since they are the company's biggest asset. Hence, retaining talent and making sure the employees are happy will eventually lead to mitigating the risk of a poor outcome. If I have to factor it at a top-down level or if you look at a magnifying glass, then these are the two key things an organization has to look at.
As a CIO, what type of investment structures and policies do you build for the benefit of the clients and how do you ensure to get ROI for the clients?
We are currently managing roughly SGD 220 million, and we have multiple funds including Buyout Fund which is equity driven, where we take controlling stakes in companies so that we can drive change management in a superior
We have built customized technology solution for our investors and portfolio companies in a very operated consultative approach to achieve the objective of returns without risking loss of principal
As a Chief Investment Officer, what are the strategies that you put forward to align your organization with your vision and mission? How do you ensure great values are instilled at TIW Private Equity?
While innovation is important, there is a difference betweenradical and incremental; to create alignment, to create success. I think it is important to have incremental innovation. Life is not always about radical. Consistent innovation is the key! So, if you have to see in terms of adding value to organizations, the most important aspect is to differentiate between the kind of innovation you want to drive. Today, organizations need innovation; it is a no brainer, but is it radical innovation or incremental innovation? While I'm in good and radical line because of the people I'm dealing with, there are certain areas of business where it has to be incrementally driven rather than radically driven.
I believe, it's important to have acceptance of policies. So, simple things like innovation, business model, strategy, sales & marketing, HR processes and supply chain play a key role in making the business more efficient and productive. I think it is important to drive incremental innovation because when you drive incremental innovation, you're able to correlate the management team and the hierarchy. Also, the company and employee force at large is able to see that there is a continuum from point A to point B, and it's not disruptive; so then they become part of the change as change agents.
Another thing is that it is very important in today's world to focus on topics such as cost leadership, what has globalization done, augmentation of online, do foreign companies get into India or any country? As companies, I believe it is always important to be on our toes, because if we are not, then somebody else is going to take away the market share. In that context, one of the best ways to drive success and create long term value is to drive cost leadership, because there is no parallel to that. Having cost leadership, you can compete with anybody. In bigger companies, the decision making can be far more bureaucratic, and empowerment is less, but in smaller companies, they can be fairly fast in decision making and empowerment is high. Hence, the need of the hour is to drive cost leadership and incremental innovation in every horizontal of the organization one should drive incremental change to add value to the organization.
How do you integrate the consideration and management of risk in the setting of strategy, achievement of goals& objectives, optimization of performance, and management of major projects?
When we begin with a customer, we typically evaluate performance, starting with margins, as they are a big indicator of the organization and setting. While it's an outcome, it is an effect of all the causes such as technology, augmentation and a particular vertical. If an organization is showing improvement in margins, they must be doing something right on the input side. So, the most important aspect from a company's perspective is definitely margins. Another thing I personally believe as a big barometer of future success is the attrition rate of an organization. Be it any company, if the attrition rate is low and if people continue to like working in the organization, eventually their productivity will go up. As they continue to work in the same setup, their understanding of systems, processes, product, or whatever service they're offering tends to move up and leads to higher productivity. So, the most important aspect to look at from a risk mitigation perspective is the risk of people and risk of capital. I can see many, but it is the risk of people in capitals and organizations that should not keep burning capital. Hence, focus on margins! Organizations should not keep losing people, since they are the company's biggest asset. Hence, retaining talent and making sure the employees are happy will eventually lead to mitigating the risk of a poor outcome. If I have to factor it at a top-down level or if you look at a magnifying glass, then these are the two key things an organization has to look at.
As a CIO, what type of investment structures and policies do you build for the benefit of the clients and how do you ensure to get ROI for the clients?
We are currently managing roughly SGD 220 million, and we have multiple funds including Buyout Fund which is equity driven, where we take controlling stakes in companies so that we can drive change management in a superior
fashion and make it market agnostic right. One option we give is, investors can invest into where we go and take controlling stakes in a market, and agnostic factor fashion will be not linked to stock multiplicity. Secondly, we have a multi-asset multi-geography fund which is a Fixed Return Fund. So, bottomline is the client. Depending on their asset allocation, style, and risk profile, either they will be comfortable by taking a little higher risk and hence look at equity returns, or they'll be wanting to take lesser risk and hence get more of a fixed return like a savings plan or income plan. Depending on the requirement or the risk, we carry-out assessment of client's profile and have these solutions in terms of different products.
In terms of driving ROI, the most important thing I want to mention is that we specialize in margin expansion and turnaround. We believe in the philosophy of zero% loss ratio at fund level, no matter what the principle or the strategy. The key goal that we want to achieve is from what may not end-up losing principal for the investor. So basically, technology is one of the most important input and a significant focus area, where we look at technology as a driver for improvement, productivity, a driver to manage costs, and rational cost rationalization. We have built customized technology solution for our investors and portfolio companies in a very operated consultative approach to achieve the objective of returns without risking loss of principal through two different products. We make sure we drive returns through this approach, but without compromising loss or without compromising principal, and by giving two options one on the equity side and the other on the income side, we have our fixed return products.
What are the characteristics of a successful CIO and how would people working for you describe your management style?
Let me highlight something important. Say my subordinate comes to my room and says that he has two news - one is good, and one is bad. I'll always ask him to tell me the bad news first. There are certain ethos which matter. If these philosophies are for general across companies and professional life, the outcome will be far better. So, one of the most important ethos I believe in is in bad news first. Secondly, we are in the investing world, so we often keep thinking about metros, but India is beyond metros. I'm not saying that it is not in metros, I'm saying India is also beyond metros. So, one of the most important commandments we look at is `Life beyond Metros'. So, we keep seeking companies to invest in, which are also in tier-II & III cities, and interestingly, the cost of operation tends to be lower in these cities. Thus, it is always worth it and fairly rewarding at the same time. I resolutely believe in the power of leadership as it can make a huge difference. The biggest top leader is someone who is technology savvy, adept, and a good listener.
So, I think these are some of the few important strengths and philosophies in terms of commandments and style of working. Last but not the least, success to me is the ability to rise from failures. People who can rise from failures see India as a developing country. Most of us come from a middle-class family background. I used to teach during my engineering through which I used to get some money which helped me buy books. Most of us are from humble backgrounds in India, but the ability to rise from failures is what life has taught us, and to me, that's become a very big ingredient in defining success as a great leader.
How do you maintain a balance between your personal and professional life? What is your success mantra?
The last one and a half years have shaken the concept of work-life balance. We always thought that meetings have to be in physical offices where we have to be present physically, and it is nine to five and nine to six job when we travel. From early morning flights to coming back on late evening flights, we had seen it all. But with COVID, things have changed. Today, the reality is, due to pandemic, the work from home culture has boomed for real. I want to put it on record that I cleared our view and we actually implemented very flexible policies. For the women workforce, we always had flexi hours, which is very rarely to find companies in India offering that. But we also strongly believe in gender equality and empowerment at workplace. But as the pandemic came, we have also implemented work from home till date. We are all across different cities and are able to manage. So, I think the concept of this personal and professional life has changed because of the policies that we have always had since high school age and college days, and the initial few jobs. I think even seasoned supervisors in companies understand this very well and they are appreciative of this.
To add to this, the mantra that I believe is to make sure that I look at informed decision making. Undoubtedly, whenever there is informed decision making, there are less surprises or shocks and the ability to manage work life balance improves. Work discipline will lead to lesser stress at work.
On a lighter note, I think if you're spending more hours at work, it is lack of efficiency because of which it is happening or is it too many things which are going wrong which requires too much intervention. So, I think systematic approach and process orientation will always help in aiding/ improving work life balance.
In terms of driving ROI, the most important thing I want to mention is that we specialize in margin expansion and turnaround. We believe in the philosophy of zero% loss ratio at fund level, no matter what the principle or the strategy. The key goal that we want to achieve is from what may not end-up losing principal for the investor. So basically, technology is one of the most important input and a significant focus area, where we look at technology as a driver for improvement, productivity, a driver to manage costs, and rational cost rationalization. We have built customized technology solution for our investors and portfolio companies in a very operated consultative approach to achieve the objective of returns without risking loss of principal through two different products. We make sure we drive returns through this approach, but without compromising loss or without compromising principal, and by giving two options one on the equity side and the other on the income side, we have our fixed return products.
What are the characteristics of a successful CIO and how would people working for you describe your management style?
Let me highlight something important. Say my subordinate comes to my room and says that he has two news - one is good, and one is bad. I'll always ask him to tell me the bad news first. There are certain ethos which matter. If these philosophies are for general across companies and professional life, the outcome will be far better. So, one of the most important ethos I believe in is in bad news first. Secondly, we are in the investing world, so we often keep thinking about metros, but India is beyond metros. I'm not saying that it is not in metros, I'm saying India is also beyond metros. So, one of the most important commandments we look at is `Life beyond Metros'. So, we keep seeking companies to invest in, which are also in tier-II & III cities, and interestingly, the cost of operation tends to be lower in these cities. Thus, it is always worth it and fairly rewarding at the same time. I resolutely believe in the power of leadership as it can make a huge difference. The biggest top leader is someone who is technology savvy, adept, and a good listener.
So, I think these are some of the few important strengths and philosophies in terms of commandments and style of working. Last but not the least, success to me is the ability to rise from failures. People who can rise from failures see India as a developing country. Most of us come from a middle-class family background. I used to teach during my engineering through which I used to get some money which helped me buy books. Most of us are from humble backgrounds in India, but the ability to rise from failures is what life has taught us, and to me, that's become a very big ingredient in defining success as a great leader.
How do you maintain a balance between your personal and professional life? What is your success mantra?
The last one and a half years have shaken the concept of work-life balance. We always thought that meetings have to be in physical offices where we have to be present physically, and it is nine to five and nine to six job when we travel. From early morning flights to coming back on late evening flights, we had seen it all. But with COVID, things have changed. Today, the reality is, due to pandemic, the work from home culture has boomed for real. I want to put it on record that I cleared our view and we actually implemented very flexible policies. For the women workforce, we always had flexi hours, which is very rarely to find companies in India offering that. But we also strongly believe in gender equality and empowerment at workplace. But as the pandemic came, we have also implemented work from home till date. We are all across different cities and are able to manage. So, I think the concept of this personal and professional life has changed because of the policies that we have always had since high school age and college days, and the initial few jobs. I think even seasoned supervisors in companies understand this very well and they are appreciative of this.
To add to this, the mantra that I believe is to make sure that I look at informed decision making. Undoubtedly, whenever there is informed decision making, there are less surprises or shocks and the ability to manage work life balance improves. Work discipline will lead to lesser stress at work.
On a lighter note, I think if you're spending more hours at work, it is lack of efficiency because of which it is happening or is it too many things which are going wrong which requires too much intervention. So, I think systematic approach and process orientation will always help in aiding/ improving work life balance.