Hey there, time traveller!
This article was published 7/6/2016 (409 days ago), so information in it may no longer be current.
It's almost impossible to calculate Prem Watsa’s success as an entrepreneur.
The 65-year-old immigrated to Canada from India in 1972 with a few dollars in his pocket. Today, the chairman and CEO of Fairfax Financial Holdings has a net worth of more than US$1 billion.
But the tentacles of his business acumen have a far wider reach. His company, which specializes in property and casualty insurance and investments, provides employment to more than 22,000 people around the world. Its investment portfolio, which used to sit at US$25 million, is now at US$30 billion, and its stock price, which once sat at US$3.25, is now more than US$500.
When you consider how many mutual funds own Fairfax shares, a significant number of Canadians have him to thank for at least part of their financial well-being.
His company reinvests between 1.5 per cent and two per cent of its profits into the communities in which it operates, which works out to many millions of dollars around the globe, including in Winnipeg.
"I’m a guy of faith, and I believe the saying, ‘To whom much is given, much is expected.’ There are a ton of blessings in my story. When you’re successful, you might say, ‘I did it all, and I did this, I did that.’ I don’t think like that. I think I’ve been blessed mightily," he said.
Watsa was presented with the International Distinguished Entrepreneur Award (IDEA) in front of more than 800 of Winnipeg’s business elite at the RBC Convention Centre on Tuesday evening.
He also addressed a group of students at the I.H. Asper School of Business at the University of Manitoba earlier in the day.
What’s remarkable about Watsa’s story is the most successful aspect almost never happened. After graduating with an MBA from the Ivey Business School at the University of Western Ontario, he started his career at insurance company Confederation Life in the mid-1970s and was almost perfectly happy there.
"If they had given me a little more bonus, a little more incentive and the freedom to do whatever I wanted to do, I’d have stayed there. All of my best friends were there. I was there for nine years," he said.
"(I left because) I wanted to be in control of my destiny. I wanted to be in charge and do things that I thought were right. In a big company, you can’t do that."
So, in 1984, he started an investment firm called Hamblin Watsa Investment Counsel with his former boss Tony Hamblin. A year later, he took over Markel Financial and renamed it Fairfax Financial Holdings.
One of those "right" things he believes in is telling shareholders about the company’s mistakes. He is adamant about providing absolute full disclosure about Fairfax’s activities, particularly its missteps.
"I’m saying if I was in your spot as a shareholder of Fairfax, what would you want? That’s what I’m giving you. If you read our annual reports, you’ll know everything about our company," he said.
That includes why Fairfax lost money on a pair of acquisitions in the U.S. in the late 1990s.
"We go back and say, ‘This is what we said and this is what happened.’ It’s a journey."
Watsa, who is known as the Warren Buffett of Canada, writes those annual reports himself in simple language every shareholder will understand, even though he could easily outsource such a mundane task.
"That forces me to understand the business and the numbers. Why did this happen, why did that happen? The best companies have the CEO writing (the annual report) for their shareholders," he said.
Previous IDEA winners include David Thomson (Thomson Reuters), Richard Branson (Virgin), Chip Wilson (Lululemon), Dame Anita Roddick (the Body Shop) and Howard Schultz (Starbucks).