Executive Exchange: 12 questions with Bill Maldonado

NAME: Bill Maldonado

TITLE: Chief Executive Officer

COMPANY: Eastspring Investments Group

Bill Maldonado is chief executive officer at Eastspring Investments Group. He is a member of its board of directors as well as the the Prudential group executive committee.

He joined Eastspring in 2021 and was previously its chief investment officer.

He has over 30 years of asset management experience and a strong track record in leading investment teams globally.

In this lighthearted Q&A, Maldonado tells AsianInvestor what song the stock markets remind him of, influential investment figures in his career and the one piece of common advice he disagrees with.

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

I think Avatar and Titanic are the highest grossing franchises but, as a big Star Wars fan, I think that's the one I would choose.

It’s obviously a very profitable franchise but, more importantly, I love the movies.

What's one commonly accepted piece of investment wisdom you wholeheartedly disagree with?

People saying “this is not the right time to invest” -- because it's almost impossible to determine when it is or isn’t the right time. This is something every investor needs to think about a lot more.

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

Especially for this year – “Up and Down” by the Vengaboys.

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

Do your homework. I remember this vividly. It was one of the first investments I made as a fund manager, and it went wrong almost immediately.

I can't remember the extent of the loss but, at that time, it appeared considerable. I thought it was the end of my career and I'd only just started.

That was certainly very impactful on my psyche and my way of thinking, and I had to admit that I just hadn't done the homework properly. That was a painful, but very valuable, early lesson.

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

That’s an interesting analogy because investing is a lot like games. Credit to Howard Marks who put it succinctly: when you think about games, there are typically three elements.

Firstly, there's an element of luck, which prevails in investing too.

Then there's the element of information: is the information visible to you? In a chess game, for instance, the information is visible to everybody. I'd like to think that that's also true in investment.

And then finally, there's an element of making decisions, processing available information, and having a strategy.

Not all games have it; some games are just blind luck, such as roulette - there's no real strategy to it.

So, I think the game that comes closest to investing for me is backgammon.

My 11-year-old son is really good at backgammon, and he often beats me! It's a great game for teaching and practicing these three different elements.

Which investment figure has been most influential to you throughout your career?

I would have to mention two: first, a former boss who had such a towering intellect that every time you interacted with him you learned something new.

Howard Marks

He just thought about so many scenarios and possibilities in the investment space.

The second would have to be Howard Marks of Oaktree Capital.

He’s written a few books including The Most Important Thing, which is sort of a play on words because the book ultimately concludes that there isn't a single most important thing.

He’s also written a deeply insightful book about market cycles. I've really enjoyed reading these and I've learnt from them.

Which emerging market do you see as the most promising for investment and why?

If I had to pick now, I would have to say India.

I've been involved with India for 30 plus years of my career and I think it's now living up to its long-held promise and it's really changing.

It's always been very strong in services and, overall, it's been moving in a very positive direction especially in terms of manufacturing technology. The Indian market is huge and you can invest at scale.

Can you describe a time when you had to handle a major financial crisis?

This would be during the global financial crisis. I was CIO for a European business then, and it felt like we were at the epicentre of the crisis.

Looking back, it was an ‘amazing’ time because you'd come in in the morning and you wouldn't have a clue what you'd be doing that day.

Usually there would be some emergency that you had to deal with, some broker or bank rumoured to be going under or another default on a vehicle that you might hold - and you had to shift positions and react quickly.

It was crazy. You were really thrown into the deep end, but you also learned so much.

Thinking back, it was an unbelievable and amazing learning experience but, at the time, it felt incredibly uncomfortable.

How do you prepare for long-term uncertainties in the market?

Preparing for long-term uncertainties is anchored around two things. One, diversification.

You need a diversified portfolio no matter how strong your views are about a particular trend or macro environment. What we’ve learnt from the last few years is that markets, like life, are full of surprises.

The second thing is the need to stress test your portfolio and your thesis. What if the oil price goes up? What if the oil price goes down? What if the dollar goes up or goes down?

There is a growing number of tools that allow us to do this effectively.

You can customise scenarios to better understand how your portfolio will react under different circumstances, even if you don't think those circumstances are likely to materialise.

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

Perhaps being stubborn. I think my family and friends would attest to that. But I believe that's probably a positive attribute in business, in the right measure.

I am also very competitive, and I like to win. These combined elements have been important in my career.

Can you discuss a time when your professional network significantly impacted your business decisions?

I would have to go back to the global financial crisis period, because the network effect was massive then.

Everybody was impacted and trying to figure out what to do next.

There was a lot of collaboration and support for each other across the industry at that time.

If a movie was made about your life as an investment executive, who would you want to play you and why?

I'm tempted to say Brad Pitt, but I’ll probably go with Bruce Willis. He has a similar hairstyle, don’t you think? And of course, he’s a great actor.

Bruce Willis

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

To actively listen to all views. Conflicts are often hidden, as people won't always admit that they don't agree or are uncomfortable.

Sometimes you have to dig for information, and active listening means being engaged, paying attention and becoming aware of any potential conflicts.

This will give you great insights, and it's only when you identify and resolve these conflicts that you can move forward together as a team and an organisation. That's been a very valuable lesson.