Defying assumptions, Dan Chung, chief executive officer of Fred Alger Management, rebuilt the investment team and, indeed, the entire money management firm after it lost 35 people in the attacks on the World Trade Center on Sept. 11, 2001.
CEO David Alger had perished in the North Tower, and Chung, who had just turned 39, immediately became the firm's leader. Founder Fred Alger, David's brother, was retired and living in Switzerland.
"If you want to talk about which firms had the best business recovery after 9/11, I think Alger would be among the Top 10 of any industry," Chung says in an interview with ThinkAdvisor. "In the investment world, I think we're No. 1."
Chung, who recently received a 2023 ThinkAdvisor LUMINARIES award for community impact, discusses leadership lessons he learned at the helm of the growth-investing boutique as well as recent trends capitalized on, such as actively managed ETFs.
Chung, now 61, who became CEO in 2006 after his appointment as president three years earlier, brings up a few of his leadership "weaknesses," as he calls them, and advises hiring talented people to "complement" any shortcomings.
"I know that I'm not a natural sales [and marketing] executive …," he says. "Perhaps if I had been [one] with lots of that experience, instead of the firm [managing assets of] $22 billion today, we would be at $60 billion."
Chung joined Alger in 1994, after four years as a lawyer. Before taking over, he served as a senior analyst on the investment team, portfolio manager and head of technology.
In the phone interview with Chung, who was speaking from his office at Alger headquarters in New York, he notes his high hopes for artificial intelligence, "a megatrend," which, he says, will help advisors "where used correctly."
Here are excerpts from our conversation:
THINKADVISOR: When Fred Alger Management lost 35 people on 9/11, among them David Alger, the firm's leader, you immediately became chief investment officer and head of the firm. What was the industry saying about Alger's future?
There was a lot of doubt on Wall Street whether we would survive. Most expected us to go out of business.
Most consultants and advisors put us on hold or terminated us. They weren't investing new money with us for several years, watching whether we could survive.
In 2006, you were named CEO. What's your biggest leadership success?
Rebuilding the investment team, generating investment performance, rebuilding the firm and ultimately winning back clients.
We were one of the hardest-hit firms [on 9/11] and, as a boutique, not one of the bigger ones.
But if you want to talk about which firms had the best business recovery after 9/11, I think Alger would be among the Top 10 of any industry. In the investment world, l think we're No. 1.
Have you made any leadership mistakes?
Not a mistake — but perhaps if I had been a sales and marketing executive with lots of that experience, instead of the firm [managing assets of] $22 billion today, we would be at $60 billion.
What recent trends have you aggressively capitalized on?
We try not to follow trends for the sake of trends. We try to listen to our clients, and when we see a demand for something, we want to meet it.
For example, starting in 2020, we introduced actively managed ETFs. That's been giving investors who prefer the liquidity and tax efficiency of ETFs a way to invest in several of our strategies that had been in mutual funds.
We're also seeing interest among investors in U.S. growth equities overseas, such as in Europe and Asia. So we've been investing in those and hired two senior vice presidents to head business development.
What trends do you see on the horizon?
I and the rest of the investment team are very focused on AI and how it's going to trend for many industries, products and services.
We see AI as a megatrend that's driving investment opportunity on all levels and in all sectors.
How will it be used in business?
AI will have applications both internally for businesses to improve their marketing and sales, and production and logistics efficiency.
It's also going to create a lot of opportunity for companies that provide the technology, whether it's software, hardware or data analytics.
We're very interested in the AI trend and who will be the providers of technology and services that are powered by AI, as well as how it will be applied and what companies will benefit from it.
How will AI benefit financial advisors?
It could really help advisors, where used correctly, in servicing clients and keeping them better informed and in helping advisors become more efficient in the back office.
But it's definitely going to be a challenge. Where you're not able to compete on a technology basis, you can compete on a different basis, like personalized service and understanding your clients. I don't think AI will be up for that job for a long time.
What leadership lessons can you share?
Recognizing that having a culture that rewards hard work and performance, a meritocracy, is very important. We let talent rise through the ranks when they're pretty young.
