Investment: Taking a risk on a good story
From the 1987 crash to 9/11 and the GFC, Fiona Mackenzie of Jarden has had her fair share of insights into risk and recovery. By
Jarden head of direct wealth Fiona Mackenzie graduated at perhaps the worst time in New Zealand history to go into finance. The New Zealand stockmarket crashed in 1987, and we never really got over it until relatively recently.
“The early ’90s was a weird time to be interested in finance to be honest because there just wasn’t anything happening. After ’87 it just went quiet,” Mackenzie says.
“I couldn’t get a job in finance when I graduated and there wasn’t even the option of finance jobs.”
Which is a phenomenon Mackenzie has not seen in London or New York, where markets crash and investors get back up and dust themselves off again with worrying regularity.
Mackenzie has had a career spanning roles in Britain and the United States. Over here, she is probably best known for her previous roles as head of external investments at the Guardians of New Zealand Superannuation Fund and head of markets at the NZX.
Now she is running the part of Jarden providing a platform for people to trade stocks themselves and dealing with investors who have well and truly dusted themselves off after the 1987 crash.
Right now eager investors are leaping onto all kinds of digital platforms which pop and whizz like a casino in your pocket.
In an interview with The New Yorker, Natasha Dow Schull – author of Addiction by Design, a book on casino gambling – compares the user interface of some digital share trading platforms to casino coin-slot machines.
Jarden’s direct platform isn’t about trading fractions of shares, but Mackenzie agrees the user interface these days has to pop.
A big part of Mackenzie’s philosophy is getting do-it-yourself investors to step back and treat the whole thing a little less like a spin at the pokies or a bet at the races. She doesn’t put it that way of course, she puts it more diplomatically as helping people distinguish between what’s interesting and what’s important.
Quite a change in approach to how investing in the stockmarket used to go. Mackenzie says the process used to be a lot more akin to purchasing life insurance. You would sit across from an experienced broker who would hand you a stack of papers with a long list of questions, then dole out sage advice at a leisurely pace.
Which is great for people of her father’s generation but not really for people who are Mackenzie’s age (50) or younger. Nobody has the patience for it, she says.
Yet equity investments are risky. She has seen markets take a turn for the worse unexpectedly before. Not just the New Zealand stock exchange after she graduated, but world markets too.
Mackenzie was on a short-term contract working for the chief financial officer of Credit Suisse in New York when one plane, then another, crashed into the Twin Towers of the World Trade Centre on September 11, 2001 within viewing distance of the company’s offices at 11 Madison Ave.
“We could actually see the towers, it was pretty horrific.’’
She says it didn’t make her want to leave New York, if anything it made her feel even more a part of the city as everybody banded together.
“It’s incredibly confronting, whether you were there or not, it was still, I think, a very difficult thing for human brains to get their head around.”
Mackenzie has always flitted between countries since she was young. A ‘‘third
culture’’ kid born in Sydney to English parents, she moved to Christchurch, then Auckland then England and back to New Zealand before she turned 16.
‘‘I always remember being the new girl at school, which I did not love.’’
At 17 she moved to Dunedin, started her law degree at the University of Otago, got halfway through and realised she was going to be a terrible lawyer so added a commerce degree.
‘‘I did some time with a small law firm in Auckland and I couldn’t believe how boring it was, it was really awful.’’
Economics and finance were always subjects that interested her, making commerce a natural choice, but graduating in finance shortly after a scarring market crash was not ideal.
She says people who graduated back then had to take a little more of a circuitous route to get where they wanted to go.
For her, that went through Deloitte where she rotated between business advisory and tax teams.
Mackenzie is not the human supercomputer type you sometimes see in finance. She is much more interested in questions like risk and in the stories behind companies.
Looking at the numbers can only get you so far, she says, but for those higher-risk stocks it’s about buying into the story behind the company.
Higher risk means that on some level you’ve also got to be prepared to lose it all, and you have to diversify.
‘‘Diversification is the only free lunch in investing,’’ she says. ‘‘When I talk about diversification with my 12-yearold kids, I don’t use the word ‘diversification’ I just talk with them about the idea that you don’t want to put all your eggs in one basket.’’
She’s given her son and daughter $500 each to invest how they want and sure enough, they’ve invested in two vastly different types of stories.
Her daughter has gone down the ethical investing track, her son has gone for large NZX20 companies.
Mackenzie gave birth to her twins in the US, where she moved after heading to Britain for two years and flitting from contract to contract.
‘‘I can remember my cousin’s husband sitting me down and saying that ‘you really need to start having a think about where you actually want to go in life’.’’
She graduated from Columbia University with an MBA in 2004 and started at Morgan Stanley where she stayed for five years. By the time she was 35, she had hit a point in her life where she had decided she would be a mother regardless of whether she had met the person she wanted to spend the rest of her life with.
Mackenzie was fully prepared for a child, but she was a little less prepared for twins, and even less prepared for having twins in 2008, just as investment banks like her employer, Morgan Stanley, were on the brink of collapse.
‘‘I’ve had some great timing in life, but I’ve had some bad timing. I gave birth to twins in August 2008, Lehmans collapsed in [September] 2008. So I’m sitting on parental leave going
‘. . . my career’s going down the toilet and all my family is in New Zealand, and I’m a single mother of twins’.
‘‘That was the universe saying ‘it’s time to come back to New Zealand’.’’
‘‘That was the universe saying ‘it’s time to come back to New Zealand’.’’ Fiona Mackenzie