Mohammad Ali Khan

One of the features of many Pakistanis is their ability to rise from modest situations to positions of considerable wealth, usually achieved through hard work and a determination to succeed. One such person is Mohammad Ali Khan who was born in Karachi and comes from a humble middle class but extremely educated family and went through school in an accelerated program owing to double promotions twice.

When other children of Mohammad Ali Khan’s age were grasping knowledge at a relaxed pace, he was grappling with concepts far more complex for his age. It can be terribly taxing on a child’s mind, but that was the training in life that later let him take on any challenge.

He completed his high school at 15 and completed an undergraduate course in Physics from Karachi. By then, his family had moved on to the U.S. He had a very high SAT score and got accepted in Princeton in northeast America on a scholarship for Physics. But that was not his destiny, nor his preference.

He never graduated in Physics as he wasn’t interested in research. What fascinated him were numbers, finance and economics. He took a course in macroeconomics and fell head over heels in love with the subject. So he had himself transferred to Rutgers State University, nearby.

He has no regrets of having left a scholarship-paid course at an Ivy League college for a university where there was no scholarship to support him. He just threw into hard work to make ends meet and pay for his educational expenses himself.

When he looks back at his life, he can see a pattern of challenges, sharp turns and blind alleys which he always chose to take. Not because there was no choice, but a comfortable, predictable career was not his cup of tea.

Mohammad Ali Khan liked to take risks, raise the bar of his personal achievement’s capacity and push himself into extremes where he could deliver despite all odds.

Being the chairman-founder of Wall Street based Investment bank at the age of 29 years, building an asset management firm from virtually nothing to $240,000,000 in equity transactions alone, being the youngest member to be included in the New Jersey State Governor’s council, Pioneering the world’s first Islamic banking Benchmark Index, taking up the challenge to be a senior advisor to President General Pervez Musharraf’s National Reconstruction Bureau in Islamabad.

There are many more firsts here and one can understand that all this has happened because his childhood experiences were that of over-reaching and extracting better-than-the-best for himself.

He mopped floors at Burger king, drove a cab on weekends, etc, putting in 16 hours of work and study every day, including weekends to support himself. He made a few dollars an hour doing hard manual work but till this day feels proud of the fact that this experience taught him the dignity of hard work and made him appreciate others who were less fortunate than him in life.

This feeling was the basis for him founding the philanthropic organization with his own funding which has done work around the world for Muslim causes. He provided 20 medical clinics in Pakistan’s rural areas to attend to the needs of 150 patients in remote areas each day. Built a school for 700 girls in Malir Karachi under adopt a school program which was inaugurated by Federal Minister of Education Mrs. Zubaida Jalal and the Interior Minister Gen. Moin-uddin Haider.

His foundation also freed 750 Muslim children from bonded labor camps in the state of Andhra Pradesh, India and provided schools and hostels for those children. These are just a few examples.

In 1988, he wrote a thesis on the topic “What would be the effects on world economy” if Soviet Union broke up. This unusual and full of foresight thesis was picked up quite a few publications. As a result, The Prudential Financial Services, the second largest financial company in the world at that time, invited him for an interview after having read it.

He was still in college and was offered a job of a trainee in Taxation and Estate-Planning Department. He accepted the offer and within 18 months was promoted to the top league in the organization. But then, this challenge was over and what attracted him was Investment Banking.

He was barely 23 then and was keen to join the Investment Banking arm of the organization. He recalls having met one of the top investment bankers of the organization who raked in profits of $5 million a year single-handedly for himself.  After the interview, he thought that Mohammad Ali Khan was not cut out to be an investment banker. That comment of his spurred Ali Khan on to become one.

Within two years of joining another investment bank, he was promoted to the rank of vice-president and became the No 1 producer in his field. He was 24 years old, was making a few million in profits a year, but then this challenge too was over and he had to move on.

He decided to join a smaller investment bank as Goldman Sachs, Merrill Lynch and Prudential, all had close to a few hundred vice-presidents and the intellectual freedom was lacking in old investment banking institutions at that time. They were rigid. He had to choose a more tedious path and so he chose to join a much smaller investment bank.

He chose to forgo larger banks because his contract here gave him the full freedom of trading and international expansion, which seemed a bigger challenge and offered a higher level of motivation and he stuck to his guns. When he joined them, they had only three branches, in less than three and half years when he left them, he had grown the organization to 22 branches and had become a partner in the bank.

He gave all that up to buy a 10-year-old organization, the KMS Investment Bank. This was the first ever investment bank license given to a Muslim in the history of Wall Street and there was a huge resistance. There was a lobby created against him from attempting to open up the doors of this investment bank. But he broke out of the box and fought to win. The first thing he did after opening the doors of the investment bank was to fire the entire upper management as he thought that he could not teach old horses new tricks.

He built the place brick by brick and attracted over $3 billion dollars in customer assets with over 450 employees and close to a 100million in gross revenues in three years. He attracted to the Board of Directors, names such as Joseph Antonini, former Chairman of K-mart Corporation, a $32 billion dollars corporation, Leonard Yablon, President of the world famous Forbes Empire, Edward Heill, Managing Director and a Senior Partner at Delloitte & Touche.

He never looked back after that. It was not money he hankered after. Once you begin earning in those denominations, money loses its attraction and is reduced to just numbers. His focus was to look for a comfortable niche in the market. His organization was too small to be a large investment bank and too big for individual investments. So he began extending finance to projects under taken by smaller countries such as Grenada, Azerbaijan etc, in addition to doing underwritings on American stock exchanges. There was a spurt of development projects. Work was swift, efficient and his organization delivered, and gradually their reputation spread by word-of-mouth.

During the Asian financial crisis of the 1990’s, his investment bank took over the restructuring of Dae Han Bank of South Korea, for peanuts in revenues but earning crucial points on their credibility record.

However, due to several reasons, the bank began registering losses in some divisions, as many other investment banks at that time were going thru a tough period of the industry, and this fact lead to the eventual closing of the doors.

He had gathered great governmental experience during his project finance days of travelling to and dealing with several countries. He was offered to join National Reconstruction Bureau of Pakistan as an advisor to the Federal Government of Pakistan, and he took up that offer, serving his country by parting his experience and knowledge. That was from 1999 to 2001.

In 2001 he moved to Dubai and set up a Corporate Buyout group, Somerset Capital, with a few handpicked investors and began to look for takeover deals. The first take over was a 10-year old software developing firm with operations in 7 countries and a client base of 18000 installations, by the name of Focus Softnet.

He restructured the operations, brought it profitability and initiated his second takeover on behalf of the group, which was a company by the name of PetrosAA, in the oil and Energy sector with offices in London, Milan, Singapore and Dubai, then PGM London Ltd, a supplier of Platinum bars to the top 7 banks of Europe. Tekstoxx was the company which followed in the telecommunications industry and this is how Somerset Capital began its growth.

One of the main issues with him is that he gets bored quickly when things are not challenging. If you give him a perfectly running company with no room for growth, it would be very difficult for him to show up at the office on time. He said in one of his interviews to a Saudi Newspaper. But if you give him a company, which is fledgling, struggling to soar in the sky, a great product with not so great a market share, he will be there at the office at daybreak to work things out, because he feel the best creation comes out of chaos.