Executive Exchange: 12 questions with Andrew Tan

NAME: Andrew Tan

TITLE: APAC CEO, Head of APAC Private Debt Singapore

COMPANY: Muzinich & Co

Andrew Tan runs Muzinich & Co.’s Asia Pacific business. He is credited with establishing the company's private debt business in Asia in 2020. 

Tan, who is based in Singapore, is a lead portfolio manager and an investment committee member on the firm’s Asia Pacific private debt strategy.

He has previously run businesses covering private debt, syndicated loans, special situations and distressed debt in the region.

In this Executive Exchange, Tan answers some fun questions such as what movie franchise he would invest in, what song the stock market reminds him of and the one thing he would change if he could go back in time.

If you could invest in the success of any movie franchise, which would it be and why?

It would be the James Bond movie franchise. Bond was created by Ian Fleming in 1953, the first movie was released in 1962.

There have since been twenty-seven productions. Despite having been created more than half a century ago, Bond continues to be reinvented and made relevant for each generation.

There is a timeless elegance to the unwavering pursuit of a cause, no matter the cost, that resonated with me and has resonated with audiences through the generations.

It’s a tenacity that I believe separates winners in life. Dressing well definitely helps too….

In the tech sector, would you bet bigger on artificial intelligence (AI), blockchain, or renewable energy over the next five years?

Renewable energy would be my top bet.

It is plain and simple for everyone to understand that both AI and blockchain require large amounts of energy to operate and energy from traditional sources is a finite commodity that will run out at some point.

If we are to be able to continue to function and even survive as a species, we need to find ways to ensure we invest in renewable energy sources that will not run out. 

Energy transition and the increasing requirements to finance this is certainly something we are very focused on at the moment at Muzinich.

If the stock market had a theme song, what would it be?

At the moment, given the market gyrations we are seeing, it could be Queen’s Bohemian Rhapsody. Did the Fed accidentally kill the US economy and sell its soul to lower interest rates?

Hopefully not, but there has been plenty of drama!

Can you recall a time when your gut feeling about an investment conflicted with the data, and what did you do?

It happens all the time - I put management through a lie detector test!

Jokes aside, the hardest ones to reconcile are those with good management, but not good numbers, because at the end of the day, what makes or breaks a business is it’s leadership.

Even if there are good numbers but its badly run, it is usually only a matter of time before things turn bad. 

Conversely, good leadership will be able to navigate through tough times towards better outcomes.

What's the most valuable lesson you've learned from an investment that didn't pan out?

It’s better to abstain from a hasty investment under time pressure without full conviction than have to deal with working things out when the investment doesn’t go well.

If you had to equate your investment strategy to a game, which would it be and why?

Tetris – thinking on your feet, solving a puzzle/finding a solutions.

Fitting the right investments into the right space and eliminating as much risk as possible as quickly as possible (when a full line of the same colour is formed, the row disappears).

What advice would you give to someone just starting their career in asset management?

Get exposure to a wide array of asset classes, get your fundamentals right across these different asset classes and never neglect to develop your sales ability.

At the end of the day, being able to sell your idea, solution, value proposition, is what differentiates the winners from the losers.

Describe a major pivot your company had to make in its strategy. What drove this change?

Muzinich & Co. Inc was founded in 1988 by George Muzinich.

At that time, financial markets were in turmoil and high-yield bonds, even those of companies in good financial condition were crashing.

George saw this as an investment opportunity and through careful and deep fundamental credit research, was able to pick out winners that enabled Muzinich to become a public credit powerhouse.

Post the 2008 global financial crisis however, the firm has pivoted into growing its private credit business alongside the established public markets business.

This came about because George again had the foresight to see that increasing bank regulations would make it harder for banks to lend effectively, especially to lower middle market companies.

This pivot has allowed us today to be a very established and entrenched player across the entire credit spectrum both public and private. 

What innovation in asset management are you most excited about right now?

The opportunity for technology to make private market investments more accessible to a wider group of investors rather than traditionally only institutional investors being able to access private market strategies.

I think this has a lot more room to grow and will help investors become more sophisticated over time.

This may balance the playing field between institutional investors and individual investors.

Beyond the numbers, what personal quality do you believe has contributed most to your success?

Perseverance, tenacity, and being truly passionate about what I do.

When I started out in private credit more than 20 years ago, many asked why I even bothered given that it was such a small niche market in Asia Pacific that had no hope of gaining scale. Why not go into public equities or bonds instead?

I stuck to this discipline because I love problem solving and the fact that every deal is different, not cookie cutter.

This passion for this space has afforded me opportunities I wouldn’t have otherwise been given and I am grateful that private credit has come of age.

What is the most important leadership lesson you've learned while leading your organisation?

Leadership is a privilege of service, not to be mistaken with a right to lead.

A true leader must always put the interest of the organisation and its people ahead of their own agenda.

This is not always easy to follow but certainly if you are able to do so, what you will be rewarded with loyalty and buy-in from the people you lead which will bring out the best outcomes for the organisation.

What is one decision you made that you would change if you could go back in time?

I’ve always played team sports but as I get older, it becomes harder to organise sports that involve big groups of people.

I would have paid more attention to picking up sports like tennis or golf that involve less people and I can continue to enjoy as the years go by.