For WAM's Dania Zinurova, patience has always been a virtue

In the world of funds management, there is no 'right' way to invest - there are many ways to successfully skin a cat. 

Yet there's one thing that you can be sure every successful investment manager does: they do the work. 

That applies to every asset class - but even more to illiquid assets. Because the reality is, if an investment goes bad, you may not be able to quickly exit the position before more damage is done. 

For Dania Zinurova, portfolio manager at Wilson Asset Management, doing the work is the cornerstone of her investment process.  

"One of my mentors used to tell me, 'Be patient, you cannot rush with your decisions when investing in alternatives. Do your due diligence," she recalls. 

In conjunction with International Women's Day, Livewire reached out to some trailblazing female fund managers. In this wire, Zinurova takes us through her career journey from Russia to Australia, her advice to women trying to crack the finance industry, her investment philosophy, and her current take on markets. 

Zinurova's profile:

• Name: Dania Zinurova
• Firm: Wilson Asset Management
• Years in the industry: 20 years
• Specialty: Alternative investments (real estate, private equity, infrastructure, real assets and private debt)
• Your favourite read: Principles, by Ray Dalio

Can you take us through your journey, to where you are today?

I have spent most of my career, which spans 20 years, in the finance and investment industry. When I was at university, my dream was to have a job that could take me across different countries, across different cultures and languages. Finance and investing was not my main interest at the time. I was looking for something that would keep me intellectually challenged and could satisfy my endless curiosity about life. 

Finance and banking initially triggered my attention as at the time the banking system was going through a major transformation in Russia which is where I was born and grew up, and I wanted to understand the drivers of those changes and the implications it would have on the economy so I decided to major in these subjects at university. 

After completing a master’s degree in Europe, I began my career in the investment industry in London where I had the opportunity to live and work and travel across most of Europe, the US, Asia and then Australia where I live now. It has been the most exciting journey since – I love the diversity of my job and seeing the impact that investments in alternative asset classes make on our everyday life. 

What’s your advice to emerging female talent starting out? 

I would encourage them to think about their life as a whole, not just about their careers. Asking questions early on. What is your purpose? What drives you? What are the bigger goals you’d like to achieve? And what can help shape the life you want and bring you fulfilment and satisfaction? 

A career without considering the whole concept of life is meaningless, it should be viewed as part of the whole – family, friendships, interests and hobbies, children and other areas. Continue learning and growing, and ask people for help. 

Be compassionate and surround yourself with people who are compassionate – you will really need it!

What is the core of your investment philosophy? Did you have any mentors who have shaped your strategy along the way (and what did they teach you)? 

I invest in alternative assets which include private equity, infrastructure, real estate, private debt, and real assets. Those are illiquid investments and one of the key factors is understanding the risks, how they are managed and whether the projected returns compensate for those risks. Those are long-term investments – we are talking about five to seven years – sometimes longer. 

One of my mentors used to tell me, “Be patient, you cannot rush with your decisions when investing in alternatives. Do your due diligence.” 

I guess it also became my life philosophy to some extent. I need to do a lot of research before making an informed decision. I have had several mentors along the way who helped me shape my investment philosophy. Roger Urwin, one of the co-founders of a global think-tank, Thinking Ahead Institute, still mentors me and he taught me a lot about conceptual thinking and the interconnectedness of various areas of our life which easily translates into investments as well. One of my mission through my work is to contribute to positive and sustainable (i.e. long-term) financial outcomes for our shareholders. I do truly care about it.

What’s your outlook on markets over the year ahead? What risks do you feel have not yet been priced in? 

I expect to see more transactions happen this year across private equity, infrastructure and private debt. 

There is a lot of dry powder in those asset classes and investors have been waiting to see some correction in valuations which has started happening last year. 

Infrastructure deals are likely to be more concentrated in sectors such as renewable energy and digital infrastructure. Private equity investors are finding opportunities in energy transition, healthcare and other more needs-based sectors which are supported by strong macro fundamentals. 

I don’t think risks such as rising interest rates and climate change have been fully priced in. There might be a few reasons for this. 

Post the Global Financial Crisis, most investors in alternative assets became more disciplined with the use of leverage so there is less focus on the impact of the rising cost of debt (albeit when it comes to valuations this is taken into account. I feel the ‘hope’ is that it is a short-term shift rather than a long-term change). 

At the same time, there is a bigger opportunity set when it comes to sourcing debt as there are more private lenders in the market now, so re-financing risk is less pronounced and might not always be priced in now. 

Climate change and its impact on some of the alternative assets (e.g. real estate, infrastructure, real assets) is another area that is really difficult to quantify when it comes to modelling the investment returns and risks. There has been a lot of progress made over the last few years in terms of assessing those risks and I know some professional valuers have already started taking this into account when assessing valuations. It is still not easy to price in that risk. Another risk factor triggered by societal and geopolitical shifts over the past few years is supply chain disruption. I haven’t yet seen it as a risk that investors price in. It’s often assessed from the perspective of how there may be a backup plan, but not something that would be translated into target investment returns.

Where are you finding the most opportunity right now?

Private equity, infrastructure, private debt and potentially some pockets of opportunities in real assets are the asset classes that I expect to be more active this year in terms of the number of transactions and size of the opportunity set. Within private equity across different strategies including growth, buy-out, turnaround and special situations, investors are looking at a range of sectors. 

Healthcare, consumer businesses, energy transition are likely to be the sectors drawing more attention because of their attractive and strong tail winds when we look at the macro-fundamentals. 

There is definitely more focus on long-term macro trends rather than short-term opportunities. Albeit for private debt investors the market will be ripe with special situations as the current environment of increasing cost of debt will put a lot of pressure on many businesses. 

Private debt should be the flavour of the year within the alternative asset classes – it is a yielding asset class, and most of the deals are done at floating rates. For investors, private debt provides a strong interest rate hedge.

Infrastructure remains very popular - one of its benefits which is the potential inflation hedge is more pronounced now as we observe higher inflation across the world. I don’t expect there will be many infrastructure deals happening in Australia this year as the focus is on markets like North America and Asia (in particular in renewable energy, energy transition and digital infrastructure) where the opportunity set is huge and competition is not as fierce as in Australia or Europe and the UK.