Wilson Asset Management

By Clancy Yeates

Three times a week, investment veteran Geoff Wilson goes for a bike ride of about 40 km or more. The health benefits of cycling are well-known, but the former stockbroker and chairman of Wilson Asset Management (WAM) is convinced there is another upside from the sport: it helps him make better business decisions.

In a world of seemingly endless distractions, Wilson compares going riding and concentrating on that one thing to a form of meditation, saying it provides “time to think” that can then help with creativity, problem-solving, or with assessing investment opportunities.

“I’ll be cycling along and then all of a sudden I’ll say: ‘Hey I think we should do this’. It removes all the noise, and gives you time for your brain to process,” he said in an interview.

“It just gives you time to think through, whether it’s investment opportunities, or business related opportunities, or problems. To me, it really helps your creativity,” he says.

Wilson, who is also the brains behind Future Generation – a listed investment company that donates one per cent of its assets to charities, initially took up cycling more than a decade ago on a doctor’s advice to help with arthritis. And he’s not the first business leader to believe that their exercise regime benefits their work.

But is there scientific evidence to support the idea that cycling or other exercise can help you make better strategic decisions?

Yes, says Dr James Broatch, a research fellow at Victoria University, who is conducting research on how exercise affects brain health. “In the past couple of decades, there’s been emerging evidence that exercise is good for the brain,” Broatch says.

Broatch adds past studies have shown that people who are fitter or healthier tend to have improved cognitive function, which refers to mental processes such as attention, memory and decision making. Fitter people also tend to have better “executive function” – mental skills that allow people to plan and focus.

While being fit is linked with good brain health generally, there is also evidence to suggest people can improve their focus while they are exercising because it improves their ability to block out other distractions. Aerobic exercise – such as cycling or running – also improves blood-flow to the brain. “It definitely improves that kind of concentration – there’s research to show that,” Broatch says.

Some of the world’s best cyclists will this weekend be competing in Wollongong for the 2022 road world championships, run by the Union Cycliste Internationale (UCI). Wilson’s WAM is one of the corporate sponsors, and the veteran fund manager is also on the organising committee, which is chaired by former BHP executive and former CEO of rail freight business Pacific National, Dean Dalla Valle.

Dalla Valle, who grew up in Wollongong and is also a keen cyclist, agrees emphatically with Wilson that going for a ride can help in making better business decisions.

“It’s a great mind-cleansing experience. When you’re out cycling, you’re often not thinking about anything else. It’s great for clearing your mind, and it does allow you clarity of thought afterwards,” Dalla Valle says.

Both Wilson and Dalla Valle also highlight the social side of cycling in a group, which they say is a great leveller. “There’s no real hierarchy. Everybody is just chatting and talking about what’s happening,” Dalle Valle says.

Wilson was an early member of a cycling group that’s grown to having about 60 to 70 people from finance, law and other professions who meet regularly in Sydney’s Centennial Park to go riding. On the Sunshine Coast in Queensland, where Wilson is speaking for this interview, he also rides with the Noosa River Riders, which splits into “oldies” and “youngies.”

Despite the growing interest in cycling in parts of the business world, however, Wilson says it still remains “very niche” in the financial market community. “I think it’s still got a fair way to catch up to golf,” he says.

And as for the share market, Wilson remains cautious despite an earnings season that beat many analysts’ expectations. The ASX200 has made a solid recovery since June, and unlike the US, Australia has not had a “bear market,” which refers to a fall of more than 20 per cent from a peak. But with interest rates expected to rise further, he says as an investor he’d be keeping “a reasonable amount of powder dry.”

“I can’t believe that we don’t end up with a bear market, to me that’s the crazy thing,” he says. “Higher interest rates means lower valuations for companies, as simple as that.”

Licensed by Copyright Agency. You must not copy this work without permission.