Pakistan's Most Amazing Money Manager Gets No Respect

Updated on

In Pakistan, it’s difficult to find a more successful money manager than Maheen Rahman.

The 39-year-old turned a loss—making asset management company into a profitable acquisition target, led her flagship equity fund to the country’s top performance and positioned her new firm for what she estimates will be a 40 percent jump in client assets this year. For all that, Rahman still struggles to prove she belongs in an industry where all 21 of her rival chief executive officers are men.

“My biggest challenge has been building a reputation and trust in a market that values grey hair and being male,” said Rahman, who oversees the equivalent of $180 million in stocks and bonds as the CEO of Alfalah GHP Investment Management Ltd. in Karachi. “After all these years, I still routinely get asked why I don’t just design clothes.”

While Rahman’s rise to the top of a financial firm would have been almost unheard of in Pakistan two decades ago, her struggle to gain the acceptance of male peers illustrates the challenge professional women still face in a country with the smallest proportion of female workers among Asia’s 15 largest economies. Investors who bet on Rahman have been rewarded with a 443 percent return from her IGI Stock Fund since its inception seven years ago, 117 percentage points more than the benchmark index and the biggest gain among 34 peers tracked by Bloomberg.

Female Workforce

Rahman, who’s also the youngest head of a Pakistani asset manager, has distinguished herself with timely bets on energy and interest-rate sensitive companies amid a rally in the nation’s $71 billion stock market that outpaced every other country worldwide except the Philippines and Sri Lanka.

Pakistan’s KSE 100 Index has returned 326 percent -- or 195 percent in dollar terms -- since Rahman’s IGI Stock fund started in July 2008 as the country completed its first-ever democratic transition of power, secured a $6.6 billion loan from the International Monetary Fund and pledged to sell stakes in state-run companies. Surging consumer spending and Asia’s highest dividend yields have also convinced investors to look past power blackouts and a war with Taliban insurgents on the Afghan border.

The gains for women in Pakistan’s $233 billion economy haven’t been nearly as strong. Just 25 percent of the nation’s female population is part of the workforce, up from 22 percent in 2008, according to data compiled by the World Bank. That compares with an average rate of 52 percent for Asia’s largest economies.

Even at Rahman’s firm, she’s one of just six women among a total staff of 48.

Wage Gap

Female employees in Pakistan got paid about 37 percent less than men in 2012, versus a gap of 4 percent for Malaysia and 10 percent for Vietnam, according to a Jan. 12 report from the International Labor Organization.

“We’re still quite far from our goal,” said Khawar Mumtaz, who heads the National Commission on the Status of Women, a state agency in Islamabad set up in 2000 to monitor how government policy promotes gender equality. “If the work environment was supportive, more women would be willing to enter.”

Rahman, the daughter of a Unilever Plc executive, graduated from Lahore University of Management Sciences in 1997 and earned a master’s degree in economics and finance from Warwick Business School in the U.K. She began her career as an analyst at Merrill Lynch & Co. in Singapore before returning to Pakistan. She joined BMA Capital Management, a Karachi-based brokerage, as the head of research in 2007, then took on the CEO role at IGI Funds Ltd. in 2009.

IGI Turnaround

Rahman doubled assets under management in her first year at the helm of IGI and led the firm to a 15 percent return on equity -- a gauge of profitability. The gains came even as industry assets shrank 7 percent in the year ended June 2010, according to the Mutual Funds Association of Pakistan.

Alfalah GHP Investment Management bought IGI in 2013 and Rahman became CEO of the combined firm.

“One attraction for Alfalah to acquire the fund was that they wanted Maheen to manage it,” said Syed Babar Ali, the former chairman of Nestle Pakistan Ltd. who founded Rahman’s alma mater, LUMS.

Rahman puts her outperformance down to three key calls. The first was a decision to stay fully invested in equities during the depths of the global financial crisis in 2009, a time when many peers were hiding out in cash and missed the ensuing rally. In 2011, when the post-crisis rebound in oil prices peaked, Rahman shifted from energy producers into manufacturers.

Biggest Holdings

Last year, she began favoring companies that benefit from lower borrowing costs, a move that paid off as the central bank cut interest rates to an 11-year low. Some of her biggest holdings in the IGI Stock Fund as of January included Pak-Suzuki Motor Co., Pakistan’s biggest carmaker, and Lucky Cement Ltd., the nation’s second-largest maker of the building material.

While Rahman, a mother of three, has climbed to the top of the fund rankings, her performance hasn’t put her on equal footing when it comes to day-to-day interactions with male colleagues.

She says the differences are often subtle. While men can crack jokes with each other at meetings, Rahman feels compelled to maintain a “proper” demeanor. That means limiting how much she smiles, putting her handbag in just the right place when she sits and keeping a personal distance from colleagues.

“You can never appear frivolous because you just won’t be taken seriously,” Rahman said.

Home Life

Like in many countries, women in Pakistan are also expected to take on most of the responsibility of raising children. Rahman says that limits her ability to network with clients after working hours. It also means dealing with feelings of “overwhelming guilt,” such as the time she found herself stuck in a board meeting instead of caring for her child at home with a 102 degrees Fahrenheit (38.9 Celsius) fever.

“Even a one-time allowance for something child related lowers you in the eyes of men in the workforce,” she said. “It’s probably also a key reason why so few women don’t continue after they have families.”

Rahman, who lives with her husband’s family and relies on her mother-in-law to look after the kids when she’s at work, makes a point to come home for lunch each day. She leaves the office by 6:30 p.m., juggling calls and e-mails from work with her household chores.

Growth Prospects

“When I go home, there’s no concept that I’m a CEO,” said Rahman, whose husband runs his own logistics company. “It’s about there’s no bread, we’re out of eggs, the laundry isn’t done.”

Even with the challenges that come with being a female CEO in Pakistan, Rahman shows few signs of slowing down. She plans to boost assets at Alfalah GHP, Pakistan’s eighth-largest money manager, to levels that rival the industry’s biggest firms in the next few years by marketing her funds to individual investors through branches of Bank Alfalah Ltd., the fund unit’s parent company.

Pakistan has 38 million bank accounts, versus less than 200,000 mutual fund investors, a sign of ample room for growth, according to Rahman. She’s counting on stock picks in Pakistan’s manufacturing industries to maintain her fund’s outperformance. The KSE 100 index rose 1.1 percent on Friday, the most since Jan. 26.

“I enjoy what I do to the point where it doesn’t feel like work,” she said.

If that ever changes, Rahman says she’ll leave.

“It’s a very high opportunity cost for me to be doing something I don’t enjoy.”