In 2003, four months out of college and still without a satisfactory job, Waseem Malleye took a step anyone who has ever been frustrated in attempts to get their career started can appreciate. He took control of his destiny.
He stood on the busiest corner in Toronto’s financial district, holding a sign that touted his credentials: “Recent U of T grad. BA economics and CFA candidate. Looking for Employment. Please call Waseem.”
As Waseem told The Globe and Mail then, “In the business world, successful people are the ones who know the benefits of taking chances and making decisions that other people don’t think of.” It was the kind of thinking any entrepreneur – or career-minded individual, for that matter – can relate to.
And it worked. In the first day, he collected enough business cards to fill up the next two weeks with job interviews. He landed his “dream job” as an asset management analyst for RioCan, Canada’s largest real estate investment trust (REIT).
His career trajectory has continued to move up ever since.
Over the years, Waseem has developed deep capabilities in financial analytics and modeling, corporate finance and business strategy, with a particular focus on investment and asset management for real estate in every asset class.
He currently utilizes these skills as vice president of International Real Estate for SEDCO Capital, the investment arm of the Saudi Economic and Development Holding Co., where he’s responsible for the firm’s real estate investments in the United States.
It’s been his analytic and financial mindset that’s helped him successfully carry out one of his biggest responsibilities – originating, evaluating and executing investment opportunities in the public and private markets.
Just as importantly, it’s Waseem’s job to manage the real estate assets to ensure their performance is up to expectations and financial returns are optimized. He has often liaised with managers of his holdings to that end, creating business and financial strategies in support of those goals. In fact, his work on this front for an earlier employer went so well that the client looked at the higher-than-expected returns and had Waseem divest the entire portfolio for a tidy profit of $2.1 billion.
His use of financial modeling – or building a financial representation of a business – has been important in finding ways to improve investment returns. It’s an exercise, he notes, that entrepreneurs who would rather be building things than playing with numbers are known to find challenging.
But Waseem points out that the crux of any business is the numbers. And it takes hard, cold and realistic numbers to “sell” your business to investors and bankers – at any stage of growth.
He also notes that whether for an asset manager with a specialty in real estate or an entrepreneur, the underpinnings are the same: “Certain inputs produce certain outputs,” Waseem says. “When the model is designed right, you change inputs to determine the changes to related outputs. That’s what gives you the intelligence you need to project your business’ future performance and guide your future financial (and business) strategy.”
Laying this sort of groundwork for a solid financial plan, Waseem says, does not require building a hugely sophisticated and complicated model or bringing a chief financial officer on board before you’re ready to fill that slot – or can afford to. The key is to keep it simple, he advises, and read up what it all entails.
Waseem talked about these and other financial issues in a recent interview with Young Upstarts.
How did you happen to start exploring financial analytics and modeling and financial strategy – what was it that appealed to you as part of your studies in university?
Waseem Malleye: I always had an interest in math and numbers because there was no ambiguity – its either right or wrong. You can score 100% on a calculus exam, but it’s much harder to score 100% on an essay exam.
What really got me intrigued was studying Macroeconomics, it just made sense to me and I enjoyed it.
What have you learned in applying this knowledge to real estate investment management which might be underestimated in other sectors – whether investment or the entrepreneurial world.
Waseem Malleye: It’s very important to carry out thorough due diligence on any investment, especially in commercial real estate. Understanding the Macro and Micro economics of the market, trends, cycles, as well as forecasting future trends. However, it all starts with a sound strategy.
What is the downside to any business that neglects this analytics and modeling that you’ve used so successfully in your career? And why do so many entrepreneurs believe this kind of modeling so difficult?
Waseem Malleye: Stress testing and modeling downside scenarios within reason are pivotal to any business. It’s difficult because it’s based on assumptions and everyone has a different threshold for risk and some investors tend to bet on their gut feeling rather than facts, not to say that’s wrong but just a different approach with a different risk profile.
A search of the Web shows many sites and books that offer any number of variations on how to do a financial model, along with a host of generic templates. What should the typical entrepreneur think about in considering the options?
Waseem Malleye: It depends on the industry. For example, a financial model in private equity is quite different from commercial real estate, but understanding the basics should be the first step. Setting up the model the first time is the most difficult part. After that, it’s just about maintaining it and adding variations as the asset type or assumptions change.
What would you consider the most important “what ifs” that entrepreneurs should think about as they devise a model that will be effective in guiding their future performance and financial strategy?
Waseem Malleye: First is determining what’s your objective and goals and what’s your risk tolerance. Once you’ve determined that, you can create your investment strategy and proceed with that model. All investors consider what if the market softens or crashes, but to what level is up to the investor to determine based on their market research and forecasting abilities.
