As we step into the first day of 2025, many employees are clearing their annual leave from the past year.
Most employment contracts cap the number of leave days that can be carried forward, encouraging employees to take their leave and maintain a healthy work-life balance.
For us, though, things are a little different.
Until the very last trading day, it is necessary that our team remains operational as our funds are tracked on a daily net-asset-value basis.
This effectively means one of our licensed fund managers must always be in the office, even if others are off enjoying their well-earned breaks.
It’s not just a routine — it’s about being ready for the unexpected.
Those rare, unpredictable black-swan events can shake up markets and impact our clients’ portfolios, so someone always has to hold the fort.
This week, that “someone” happens to be me.
So, I’m here making sure everything runs smoothly.
On top of that, I also oversee several quant teams in mergers and acquisitions (M&A), coordinating across time zones while keeping up with live deals and investment portfolios.
The reason I am sharing this anecdote is to highlight the level of responsibility involved in managing people’s money.
It’s a delicate process, and it’s why our team follows a meticulous operational manual to ensure we get it right every time.
SHOULDERING ACCOUNTABILITY UNDER PRESSURE
When clients decide to entrust us with their money, we must conduct a risk assessment during onboarding to ascertain their risk appetite.
With this assessment, we can then determine the appropriate strategy to manage the clients’ money based on their risk tolerance and investment horizon.
Not all clients share the same investment expectations.
Some seek minimal returns that outpace annual inflation, while others hope for extraordinary returns to achieve financial freedom.
Most fall somewhere in between.
It is our role as fund managers to manage expectations.
As market forces are beyond any individual’s control, investments sometimes do not unfold as planned.
The true test of a fund manager’s mettle arises during challenging times, rather than in a bull market.
A truly exceptional fund manager demonstrates their quality by navigating a bear market effectively.
My wife often wonders why I chose to stay in investment banking for so many years.
Most quants jump ship after three, tops.
She thinks it’s a huge burden—handling other people’s money, dealing with the pressure of never making enough when things go well, and facing their frustration when losses happen.
That’s not all—there’s the added stress of dealing with tax authorities, regulators and governments.
Then she asks whether all the strain is worth the relatively lucrative fees and suggests that I could pursue something more normal.
Frankly, the demands that we shoulder are extraordinary.
Year-round, through market cycles, we experience an emotional rollercoaster.
If a fund manager becomes desensitised to their fiduciary obligation, it is a troubling sign.
The burden of managing money should always persist, as it underscores the existential purpose of the profession.
RETURNS THAT MATTER: FOCUSING ON LONG-TERM GAINS
In the pursuit of returns, risk is always lurking around the corner.
The higher the targeted investment returns, the higher the risk – a direct correlation exists between risk and returns.
Knowing this, a fund manager’s top priority is not chasing returns, but rather minimising risk.
While I cannot speak for others, this is the mindset we adopt in our firm.
When you lose money, recovery becomes increasingly challenging.
For instance, if you fall 10 per cent, you need to generate 11 per cent to break even.
A 50 per cent loss necessitates at least a 100 per cent gain to recoup.
This illustrates why funds such as Melvin Capital, which imploded during the GameStop saga in the United States, struggled to recover despite capital injections from hedge fund giants like Point72 and Citadel.
Gabe Plotkin, the star fund manager from Point72 who spun off in 2014, averaged 30 per cent a year between 2014 and 2020.
By January 2021, Melvin Capital had assets under management (AUM) of US$8bil or about RM35.2bil.
Unfortunately, during the GameStop short squeeze in 2021, it suffered losses of 53 per cent, amounting to US$6.8bil, at one point losing over a billion US dollars a day in the first quarter of 2021.
This highlights how difficult it is to climb out of a deep financial pit.
Therefore, the most important rule is to do everything possible to keep risks to a minimum.
Simply put, investments should only be made when there is sufficient margin of safety to cushion the downside, and when the risk-reward ratio justifies the decision.
REPUTATION AND TRUST IN THE FINANCIAL INDUSTRY
We have witnessed the growth of fund management, private equity and venture capital (VC) industries globally, including in Malaysia.
Whether driven by years of ultra-low interest rates that spurred liquidity flows into capital markets, or the tremendous post-war wealth accumulation of the past 80 years, demand for wealth-management services remains robust.
The younger generation of wealthy families has also shown interest in the money management business, finding it more glamorous than operating the enterprises started by their forefathers.
Once, while finalising an urgent deal with the chairman of a public-listed Malaysian company, I overheard his chief financial officer (CFO) making a pointed remark about how Goldman Sachs’ reputation had taken a hit after being embroiled in some high-profile controversies.
With a sceptical tone and a side-eye in my direction, he openly questioned whether someone like me—young, using what he dismissed as “anti-establishment” though I built and proudly called them Fortress—could really be trusted to handle money or make sound investment decisions.
I couldn’t tell if he was referring to me or my former bosses.
Either way, it didn’t bother me.
With a solid track record behind me, I simply stepped up, took charge and delivered what was needed.
Still, I do not fault him for his observation.
It wasn’t the first time our firm’s baggage had made its way into a meeting, and it probably won’t be the last.
What he said is valid – the right to allocate capital should not be a birthright but an earned privilege.
The best fund managers are those who have proven themselves over decades, navigating multiple market cycles and enduring.
In short, they are individuals who have earned their stripes and the respect of industry peers.
Lately, I’ve been getting plenty of requests to weigh in on the string of negative news about collapsing VC investments such as FashionValet, eFishery, and ongoing exit concerns surrounding Aerodyne and Carsome.
It’s got high-net-worth clients, limited partners, and investors on edge, understandably so.
Sure, there are bigger, deeper structural issues in the VC ecosystem, but let’s not go down that rabbit hole just yet.
Another day, maybe.
What’s really been interesting is the flak I’ve caught from some government officials over my takes on oil and gas—especially anything about Petronas and Petros that doesn’t align with the “state interest” narrative.
Then there’s the criticism over my views on banking valuation methods and political interference in the economy.
Not every opinion is going to land well with everyone and that’s okay.
A considerable disagreement keeps things engaging.
Speaking of engaging, last October in Hong Kong, we somehow managed to cause quite a stir at a conference right in front of Chinese Vice-Premier and economy tsar He Lifeng.
The ripple effects still haven’t died down.
Not long after, I received an email from a senior Malaysian investment banker who, perhaps inspired by the piece I wrote about the event, quoted none other than JP Morgan CEO Jamie Dimon:
“If you’re in a knife fight, you better damn well bring a knife. It’s time to fight back the regulators all over.”
In the high-stakes world of business and politics, passivity simply doesn’t cut it.
You have to defend your corner—or risk having someone else take it from you.
As the New Year begins, there is much to be grateful for.
While 2024 was far from perfect and rife with uncertainty, Malaysia’s capital markets have made reasonable progress from years of dismal returns.
Next year appears poised to be a new chapter of volatility, with President-elect Donald Trump returning to the White House.
Love him or hate him, the next four years promise to be nothing short of exciting.
Leading the charge is Elon Musk, the world’s richest man, who’s been tapped to head the government’s new efficiency commission.
If Musk’s track record is anything to go by, this could get interesting.
Remember when he bought Twitter—now called X—and slashed 80 per cent of its staff?
The surprising thing is that X doesn’t display any glitches despite the app’s increased functionality.
Now, Musk is setting his sights on a bigger prize: trimming a staggering US$2 trillion off the federal budget through his Department of Government Efficiency (DOGE).
It’s bold, audacious and very Musk.
Maybe it’s time for Malaysia to take a page out of DOGE’s playbook.
Before I wrap up, I’d like to take a moment to thank the Sarawak Tribune’s editorial team and graphic designers for their continued support and encouragement for this column.
Wishing all my readers a Happy New Year.
Medecci Lineil has over a decade of experience leading a niche-focused team within Goldman Sachs’ investment banking division (IBD). His expertise extends beyond the bank, having been instrumental in establishing consultancy firms in Kuala Lumpur and Singapore, where he serves as a founding board member.
