"The importance of risk management and pitfalls of exuberance": Q&A with Media Super's new GM, Investments
As a teenager, Norman Zhang dabbled in the stock market for fun. Now, he manages over $5 billion of assets for over 85,000 members as Media Super's new GM, Investments. Having previously been the fund's lead consultant at Frontier, Norman speaks of his relationship with the fund, and of a particularly memorable investment. He also outlines his plan for the coming year, shares the best advice he's received, and names an influential industry figure who encouraged him to look at investments "from a long-term lens".
As a teenager, Norman Zhang dabbled in the stock market for fun. Now, he manages over $5 billion of assets for over 85,000 members as Media Super's new GM, Investments. Having previously been the fund's lead consultant at Frontier, Norman speaks of his relationship with the fund, and of a particularly memorable investment. He also outlines his plan for the coming year, shares the best advice he's received, and names an influential industry figure who encouraged him to look at investments "from a long-term lens".
What initially attracted you towards a career in financial services?
I initially wanted to be a dentist but that's another story. I credit my father who first gave me a bit of money to dabble in the stock market when I was teenager. I felt like a superstar in 2006, but that notion soon turned sour when the GFC hit. Despite losing most of my savings, I learned an invaluable lesson about the importance of risk management and pitfalls of exuberance. Investing and my experiences in the GFC also showed how dynamic and interesting markets can be, solidifying my passion for investing.
What are you most looking forward to in taking on your new role?
Media Super has a diverse and vibrant member base, and I'm looking forward to engage with them and understand what is truly important to our members from an investments perspective, whether it be performance, responsible investing or climate change. I believe how we invest should reflect the values of our members.
What are your key goals for your first 12 months in this role?
Media Super has, in recent years, delivered strong performance outcomes by focusing on the basics of keeping the portfolio simple, and making key decisions when the risk/return expectations are attractive. I aim to continue with this philosophy, but also focus on areas where value can be added without taking on much additional risk. It's not particularly exciting but initiatives around improving tax efficiency and more effective use of excess cash can make a long-term difference.
"Investing and my experiences in the GFC also showed how dynamic and interesting markets can be, solidifying my passion for investing."
In what ways has your previous experience prepared you for this role?
I had previously been on the Media Super account at Frontier Advisors for over five and a half years. Having a strong working relationship with the Executive and the Board, an intimate knowledge of the portfolio, and sharing a unified investment philosophy certainly makes the transition easier.
What has been one of your most memorable investments to date?
Media Super had a sizeable investment in an equities strategy with a deep-value style bias since 2013. 2013 to mid-2016 was a tough time for value investing and the strategy significantly underperformed during this period. It is always difficult to hold onto an underperforming investment (over several years) but the Media Super Board held its resolve as there was nothing fundamentally wrong with the manager. The value style rebounded sharply from late 2016, and the investment recovered all its prior underperformance. The significance of this investment was that it demonstrated firsthand the benefits of having a long-term investment mindset, but also the potential for value destruction if short-termism were to drive investment decisions.
Who has had the biggest influence on your life/career so far?
From a career perspective, I have had the good fortune of working with many brilliant people who have shaped my journey to date. If I were to pick one person, I would say Fiona Trafford-Walker, who was the previous Director of Consulting at Frontier Advisors. Fiona was a great mentor to me, espoused the importance of looking at investments from a long-term lens and encouraged me to always back my views, as long as the facts supported it.
What's the best piece of advice that you have received?
In my first job at Ernst & Young, one of the senior managers had this saying "don't talk about what the problems are, always focus on the solutions." This philosophy stuck with me, and helped me navigate many complex situations throughout my career without getting overwhelmed by what can't be done.
...and what advice would you offer to an industry newcomer?
At its core, superannuation is about building the best retirement outcomes for Australians. I believe most things will fall into place if you always have the members' best interests at heart.
What was your very first job?
Summer casual, selling TVs at Myer.
If you weren't in finance, what do you think you'd be doing?
Innovation has always interested me, so the tech industry might be a good fit.
