On Tuesday, Temasek Holdings announced its leadership succession plans at its wholly owned management and investment arm Temasek International (TI).

Dilhan Pillay Sandrasegara, 55, currently deputy CEO, will succeed Lee Theng Kiat as its CEO from Apr 1.

Lee, 65, will take over from Ho Ching as chairman of TI on the same date.

Ho will remain as executive director and CEO of Temasek.

But what is the actual significance of this leadership change?

According to Temasek's press release, Pillay will be responsible for the role of Temasek as an active investor and shareholder.

He will also oversee the operations of the firm, and the organisation of its talent and resources to deliver sustainable long term returns for Temasek.

But this change may be more significant to Temasek's leadership renewal than when Lee took over as CEO of TI more than three years ago in Oct 2015.

And here's why Dilhan Pillay is likely to be next Temasek CEO when Ho Ching eventually steps down

Age

At 55, Pillay is six years younger than Lee when Lee took over as CEO of TI.

There was little leadership speculation when Lee took over. One reason might be that 65-year old Lee is the same age as Ho.

It is a different case for a younger leader like Pillay.

Pillay is in his 50s, not 60s. He is four years older than former CEO-designate Charles Goodyear, who was supposed to take over Temasek in October 2009.

However, the former head of natural resources company BHP Billiton and Temasek announced in the same year that they had mutually agreed that he would not be taking over as CEO, citing differences in opinions on strategy.

The key leadership change was made last year

In fact, the senior management changes at Temasek last October were clear signals that leadership succession decisions have been planned in advance.

Clarity, with regard to the next generation of leaders, at Temasek, was provided when Pillay was appointed Deputy CEO of TI, while Chia Song Hwee was appointed as the President & Chief Operating Officer of TI.

Effusive praise from Ho and Lee

Lastly, the significance of this move lies in how the Temasek leaders praised Pillay and his promotion yesterday.

When the announcement of Lee as the CEO of TI was made in 2015, there was no comment made by Ho.

Granted, Ho was on a part-time sabbatical then.

It's different this time, for Ho happily declared,

"The Temasek Board, together with Theng Kiat and I, are pleased that the future leadership team of Temasek is well in place."

Ho also noted that she was glad that Lee has agreed to take over her as Chairman of TI, and to support and guide Dilhan and his team.

Lee was equally enthusiastic about his compliments of Pillay.

In his announcement at a briefing on Mar 20, Lee, told the staff that "Dilhan will bring his vision and passion for our mission to his new role".

He added,

"Dilhan has the ability to connect the dots, a keen eye for details and practical solutions, and a boldness to break new ground in anticipation of longer term trends.

He also has the support of his peers and colleagues to take the lead and reshape Temasek to be more ready to invest into a better, smarter and more connected world, and in a new environment with cyber threats and technological opportunities".

Dilhan, who joined Temasek in September 2010, comes with an impressive CV.

Since joining Temasek, Dilhan has held various leadership roles, including as the Head of Investment, Portfolio Management, and Enterprise Development Groups. He has also led various market teams including Singapore, the US and Americas.

Prior to Temasek, Dilhan was the Managing Partner of Wong Partnership LLP, one of the largest law firms in Singapore. He practised law for over 20 years in the areas of mergers and acquisitions, corporate governance and general corporate law.

He graduated from the National University of Singapore with a Bachelor of Laws degree, and obtained a Master of Law degree from the University of Cambridge.

Here's the man himself with a few words:

"The Temasek of today is a very different one to that which I joined, almost a decade ago. Today, we have a more global portfolio and diversified workforce; and we have actively transformed our portfolio from its Singapore origins, to one which is growing strongly with Singapore and Asia. In the recent decades, we have also tapped on longer term opportunities outside Asia.”

“The world is much more connected now. We look at global trends, invest across the world, and are constantly adapting ourselves to stay relevant. We are a builder of businesses, and more importantly, talent.”

“I am fortunate that we have a team in Temasek with a strong sense of purpose and a commitment to integrity and excellence. These are built on the foundation laid by many generations of dedicated staff, including Ho Ching and Theng Kiat. I look forward to working together with the team to take Temasek into the future".