It is fitting that Malaysia’s sovereign wealth fund would be called Kazanah Nasional, which means “national treasure” in Malay. Incorporated in September 1993, the fund holds and manages the government’s commercial “treasures” and, additionally, has the mandate to create new wealth through strategic investments in industries deemed to be important for the country’s long-term development. The complicated nature of the fund’s multitude of objectives (what Khazanah calls its “triple bottom line”) could be expected to dilute the fund’s clarity and, as a result, damage financial returns. But, interestingly, the $24 billion fund has had a remarkable few years, with a compound annual growth rate (CAGR) over 13% since 2004! How’d the Malaysian SWF do it?
Some (and perhaps much) of the credit rests with Managing Director Tan Sri Dato’ Azman bin Hj. Mokhtar, who took over at the helm of the Malaysian SWF in 2004 when the run of good years began. Indeed, Mr. Azman’s success at Khazanah has been quite impressive. A former banker at UBS and Salomon Smith Barney, he has developed a reputation as a savvy investor and turnaround artist. And, lucky us, he is more than happy to expound on some of his secrets to success. In fact, after reading recent interviews and speeches, I feel compelled to bestow upon him the honor of a “deep thoughts” post. So without further ado, here is Mr. Azman…
…on the types of people he looks to hire into his organization:
“Sometimes, I am reminded by Marx, not Karl, but Groucho, who says that you should not enter a club that would have you. Generally, we hire people who don’t want to join, if you get what I mean.”
…on his management style:
“I coined the term macro managing instead of micro managing. In the areas of strategies, for example, it’s a joint thing, so we discuss with the CEO and in the boards. But if companies are in trouble and they are not managing their affairs, there will be a period of time that we do manage. You roll up your sleeves and go in. But only for a period of time and then you have to source and find the right CEO and the right successor. The best thing is to leave them alone, and have periodic checks in terms of performance management.”
…on the importance of governance and management in his organization’s success:
“…before we get too enamoured about new, new things, one key success factor in delivering results we believe has been the discipline and doggedness of execution, of relentless and continuous improvement and of detailed programme management. These are the simple, even boring, incremental building blocks of transformation work. Staying the course is at the heart of this and indeed I am reminded by the wisdom of the American comic and sometimes philosopher Woody Allen, who rightly observed that “Ninety percent of life (and success) is showing up”. A variation, no doubt on Edison’s famous line that “Genius is 1% inspiration and 99% perspiration”.
…on the balance between public and private involvement in the Malaysian economy:
“We would do well to remember that indeed, as has been reminded by our elders, that pragmatism and a non-dogma dogma, or a no-ideology ideology is indeed a touchstone principle established by the founding fathers of modern Malaysia. And this principle has served us well, and so long as we remain honest and sincere in our analysis, in our planning and then in our application, I believe it will continue to serve us well. Indeed, as Deng Xiao Ping memorably said, it does not matter whether the cat is black or white, so long as it catches mice.”
As it turns out, Mr. Azman was recently appointed to another three-year term at the helm of the Malay SWF. So perhaps we’ll have the pleasure of more deep thoughts…and Malaysian successes…in the near future.