Clemente, Lilia C.

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Clemente, Lilia C.

(1941-)
Clemente Capital, Inc.

Overview

From the beginning of her career, Clemente has taken the position that global investing offers the best way for investors to reduce risk and enhance returns. Her firm, Clemente Capital, Inc., has offices in Beijing, Manila, Seoul, and New York City. It aggressively seeks attractive companies in more than 30 markets in which to invest. As a global strategist, Clemente plays an active role in Clemente Capital's investment committee, where investment decisions are made for the firm's public and private pension fund clients, private individual accounts, and other accounts. She is an ardent feminist who attributes her success to, as she puts it, the three G's: God, genes, and grunt work. The breakneck pace at which she works has led some critics to refer to her as the "Philippine Tigress," but she is also known for using her charm rather than abrasiveness to accomplish her goals of pursuing advantageous investments around the world.

Personal Life

Lilia Calderon Clemente, a diminutive woman with inexhaustible energy who was described in Asiaweek as the "wonder woman of Wall Street," was born in Manila, Philippines, on February 21, 1941. Her father, Jose Calderon, was a prominent lawyer who helped draft the country's 1973 and 1987 constitutions. In 1972, he spent two months in jail due to his opposition to the government of Ferdinand Marcos. Her mother, Belen Farbos Calderon, taught psychology at the University of Philippines, served as governor of the province of Nueva Viscaya on the island of Luzon, and was the first woman to hold a seat on the Manila Stock Exchange.

The oldest of seven children, Clemente graduated from the University of the Philippines in 1960 with a degree in business administration. At the age of 19 she left for the United States to study economics and international trade at the University of Chicago. She graduated in 1969 with a master's degree in economics and an advanced business degree. In Manila in 1962, she married Leopoldo Clemente, who had received a master's degree in business administration from Northwestern University in Chicago. In addition to being partners in life, the two are also business partners. He is the president and chief investment officer of Clemente Capital, Inc. and a quiet, introverted balance to Clemente's dynamic whirlwind.

Clemente is active in many civic groups and foundations, particularly those with an interest in Asian-American affairs. With her husband, she has set up a scholarship fund to help promising Filipino students complete college. She is also a board member of the Securities Industry Association (SIA). Her autobiography, Growing Up In World Street, was published by Japanese publisher Shufonotomo in 1990.

Career Details

Clemente began her career by spending three years as an investment analyst and portfolio manager responsible for covering metals, steel, retailing, and consumer industries at CNA Financial Corporation. In 1969, at the age of 28, she was appointed as the director of investment research and assistant treasurer at the Ford Foundation. She was the first woman and youngest officer in the Foundation's history. For the next seven years, she served as manager of the Foundation's research staff and spurred the globalization of its $3 billion portfolio by investing $150 million into the Japanese market.

In 1976, at the age of 35, Clemente left the Ford Foundation and, with $25,000 of her own funds, founded Clemente Capital, Inc. The business had one secretary, rented furniture, and operated out of a small office on Park Avenue in New York City. It concentrated initially on economic and business consulting with an emphasis on the Pacific Basin. The firm's first major success was its contract to provide global investment management services to Mitchell Hutchins, the asset management subsidiary owned by Wall Street giant Paine Webber, Inc. Clemente spearheaded Hutchins' successful launch into global investing with the Paine Webber Atlas Fund. In 1985, that fund was ranked number one among all global funds.

In 1986, Clemente Capital, Inc. reorganized its business to focus on managing money with a global emphasis and subsequently listed two closed-end mutual funds on the New York Stock Exchange: The Clemente Global Growth Fund in 1987 and The First Philippine Fund in 1989. The Clemente Global Growth Fund focuses on securities in small and medium-sized companies in the United States, Germany, and Japan, and on blue chips in the Philippines, Thailand, and Mexico. This fund has faced many challenges. According to Richard Phalon, in Forbes, early in 1989 Thomas B. Pickens, III, and the Sterling Grace group attempted to take over the fund. Phalon reported that, although it initially appeared that the takeover would be successful, the challengers had not given enough consideration to the strong ties that Clemente had with her Japanese investors. When approached by the Grace-Pickens group, the Japanese made it clear they were opposed to hostile takeovers.

In April 1996, the board of directors for Clemente Capital, Inc. made Wilmington Trust Company, the eighth-largest personal trust company in the United States, the Global Growth Fund's strategic partner for domestic investments. The board took action when the fund failed to benefit from the long U.S. bull market and was being buffeted by volatility in emerging markets. A year later, after fundamental adjustments in its portfolio, the fund outperformed its benchmark, the Financial Times Actuaries World Index, for the first quarter of 1997. The fund's problems were not over, however, in September 1997, with the firm's total investments at $63 million, Forbes, termed the fund a "consistent laggard" because of its continuing below-average performance, and reported that shareholders had approved a motion urging new management.

The First Philippine Fund, by contrast, has enjoyed strong growth and is worth over $100 million. It was created on the eve of the attempted coup against the government of Philippine president Corazon Aquino. Clemente's foresight had kept most of the fund in U.S. Treasury bonds, and its loss as a result of the attempted coup was only 13 percent. In the first six months of 1991, it invested an estimated $33 million in the Manila stock market. In 1997, The First Philippine Fund was ranked as the number one fund in closed-end fund performance by Lipper Analytical Services and received a four-star rating by Morningstar. The fund, with $126 million in assets in September 1997, invests exclusively in Philippine companies.

In 1992, Clemente initiated the Cathay Clemente Holdings, Ltd. Fund, which invests in new Chinese companies. To help business along in China, she established an office of the Manila-based Asian Securities Institute in Beijing.

Social and Economic Impact

Through her firm grasp of economic realities and her ability to spot emerging markets, Clemente has changed the ways in which other investors see and invest in these often overlooked emerging markets. Her company's investments in developing countries not only has improved the living standards and economic opportunities in these nations, but it has also brought them closer to the rest of the world, as the global market has expanded past national borders once thought impenetrable. Her small company has reaped the benefits of these investments and she now controls over $450 million. The company oversees staff in more than 15 countries and conducts business in 18 languages.

Chronology: Lilia C. Clemente

1941: Born.

1960: Graduated from the University of the Philippines.

1962: Married Leopoldo Clemente in Manila.

1969: Graduated from the University of Chicago.

1976: Founded Clemente Capital, Inc.

1987: Founded The Clemente Global Growth Fund.

1989: Founded The First Philippine Fund.

1990: Wrote Growing Up In World Street.

1992: Founded Cathay Clemente Holdings, Ltd. Fund.

1994: Pledged $5 million to upgrade telecommunications in Southern Mindanao.

In 1994, Clemente pledged $5 million to help upgrade the telecommunications network of Southern Mindanao in the Philippines. The financing for this investment came from the Philippine Strategic Investment Fund. This is but one of the many dozens of smaller funds that Clemente's company manages, which include the Freedom Global Fund, the First Philippine Fund, the Freedom Global Income Plus Fund, and the Sentinel Global Fund.