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SPARK OF THE CORPORATE

The journey of this immigrant who landed in Canada with $8 in his pockets to being celebrated as the Warren Buffet of Canada, the Indo Canadian investment guru, the Oracle of Ontario is quite fascinating. The Canadian businessman, Prem Watsa, the founder, Chairman and CEO of the Toronto based financial services firm Fairfax Financial Holdings invests billions of dollars across the world not just in insurance ventures, but also in restaurants, sporting goods stores, newspapers, smartphone makers etc. This global finance stalwart has a track record of 40 years in investment management.

Education and migration...

Following his passion for maths and chemistry and his father's advice, he did his bachelor's in chemical engineering from IIT Madras. Apart from studies, he also excelled in sports and games. He soon figured out that his heart lies in business and not engineering. After the graduation, he wanted to study further on management and wanted to get into IIM-Ahmedabad as it's graduates are placed in good positions. However, he could not make it to the IIM in the first chance. He worked for a pharma company in Hyderabad for an year, studied harder simultaneously, re-applied the next year and got in. Aspiring to join a good international graduate school, Prem quit IIM in a month and moved to Canada to join his brother. He then enrolled himself for MBA in University of Western Ontario. He met the college fees through selling air conditioners and furnaces door to door. He says that being an immigrant helps you to polish the qualities you never knew you had. Being at the very bottom, the only way to go is up and considers his children less fortunate for not having had the immigrant experience. He does not shy away from sharing his initial struggle as an immigrant in Canada and the difficulty he had in finding his first job.

First job...

He met the love of his life, Nalini Loganadhan, during his IIT days. An year after moving to Canada, he brought her onboard and got married. As he was still a student then, they survived on his door to door sales job. Post his masters, though he continuously applied for jobs, this immigrant was left behind by the established Canadian counterparts. He and three others were called for the second round of interview in a company. With no other applicants showing up, he finally got himself placed as an investment analyst in Confederation Life Insurance Company in Toronto. He was mentored by his manager John Watson who gave him a copy of “Securities Analysis” by Benjamin Graham and David Dodd, the “Bible of Value Investing.” He admired Benjamin Graham, a Columbia business school professor and investment manager, to a stage where he named his son Benjamin. Coincidently, Ben Watsa is also into value investing. He rose through various positions including that of the Vice President of the company.

After working close to a decade in Confederation Life Insurance Company, in 1984, he and his former boss Tony Hamblin along with a few others from Confed founded an asset management company called Hamblin Watsa Investment Counsel Ltd. Prem serves as the Vice President of the company.

Founding Fairfax...

In 1985, he arranged a group of investors and took control of a small, almost bankrupt Canadian trucking insurance company with $10 million in premiums called Markel Financial. He quickly identified that all it needs was capital injection and revived the company by infusing fresh capital. This eventually became the base for Fairfax Financial Holdings Limited. Two years later he changed the name and re organised to what we see today. Apparently, Fairfax stands for fair, friendly acquisitions. How thoughtful a title! Since then, he has managed to grow the company’s book value by approximately 20% annually which is a terrific record. Call it his conservative upbringing or a function of his personality, this disciple of Ben Graham built his empire through relatively safe and steady approach of value investing. He has been the Chairman and CEO of Fairfax since its inception. This deal maker and value investor is known for his excellent reading of market, for his exceptional investing skills and business acumen. The India born billionaire is also a Chartered Financial Analyst.

A great business leader...

Prem is not just an excellent value investor, but also a great business leader. It is very interesting to note that most of the core people he started with in 1985 are still with the company. From the very beginning, he made it a point to treat his employees well. This speaks volumes about him as a business leader.

A selfless philanthropist...

Prem and Nalini lives by the saying “To whom much is given, much is expected”. For them, philanthropy or giving it back to the community, as they like to call it, is close to their hearts. While setting up Fairfax, one thing they both were very clear was to invest in the community that helped them grow, if they become successful. Eventually they did. They stuck by their decision and a percent or two of their pre-tax profits goes to charity every year, which comes to a few millions. Prem has contributed millions of dollars to organisations like The Hospital for Sick Children (SickKids), Royal St. George's College and The Lyford Cay Foundation towards providing quality education to underprivileged children and for healthcare causes. He has helped Horatio Alger Association, an association that raises money to fund hundreds of university scholarships for students in need, to raise $2.6 plus millions to fund scholarships for students who are struggling with adversity.

How a book can change you...

In his early twenties, during a casual conversation with a fellow passenger on a train journey, Prem was asked if he had read the book called Think and Grow Rich by Napoleon Hill, which was a study of people who had become financially successful and was gifted the book. The author talked to 500 successful Americans and summed it up as, ‘what the mind can conceive, the mind can achieve.’ Prem found the book highly motivational and learned that success is in your head. He was convinced that if you really want to be successful – in any field you might choose – then you surely will be. He considers having introduced to that book at such a young age as a life changing moment. He quotes the book as “the single best book that I have read and it changed my life forever”. He doesn't forget to give copies of this book to young people he meets.

Personal life...

Prem Watsa likes to keep a low profile. He is a soft spoken, low ego, humble person. He draws a salary that is modest for the field. He is a part of many philanthropic organisations. A committed Christian, he deeply involves with the Church.

Prem was an active sportsman during his college days. He was the Institute Sports secretary of IIT Madras and loved playing hockey and table tennis. He still finds some time to play golf, tennis and occasionally, table tennis.

Awards and recognitions...

Holds an Honorary Doctorate of Laws from the University of Western Ontario, an Honorary Doctorate of Sacred Letters from Wycliff College of the University of Toronto, an Honorary Doctorate of Divinity from Tyndale College
Won the Global Indian Award for Corporate Excellence in 2017
Won the International Distinguished Entrepreneur Award in 2016

A word to the future generations..

Act upon the experiences and turning points of your life.
Have faith in God and practice it. It will give you a guideline on how to live your life, and will help you make all the right choices for a wonderful future.
Once you are successful you should always remember to pay it back and help others who are less fortunate. You will find that personally rewarding.

Memberships and associations...

Chairman of the Investment Committee of the Hospital for Sick Children Foundation, the Investment Committee of St. Paul’s Anglican Church, the Investment Committee of the Royal Ontario Museum Foundation.
Serves on the Advisory Board of the Richard Ivey School of Business
Former Chancellor of the University of Waterloo.

Quotes

As long as you are willing to work hard and do something about which you are passionate, then there is unlimited opportunity.
I believe education is the way to rise above adverse circumstances. With an education, there are no limits to what can be accomplished.
Welcome instances when you’re out of sync or out of favor because that’s where opportunities come from.
Keep the fascination with business going as it’s constantly changing and that there’s always something to do.

Hope readers caught up the spark …

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