Ziad K. Abdelnour
President & CEO
Blackhawk Partners, Inc.
Lebanese SA: Good evening Ziad. Please could you give us a summary regarding your background:
Good evening Eugene….Well, I was born in Beirut, Lebanon in the 60s. Spent my early years in Lebanon; my teen age years in France and since 1982, starting with my graduate studies at the Wharton Business School, in the US.
I can say that as of today the US and more particularly New York City is the place where I spent more than half of my life. Hence, I think and feel very much like an American though still very proud of my Lebanese heritage.
Which person(s) had the greatest influence in your life, and why?
People who changed the world order in a positive way.....starting with Jesus Christ
What (or who) influenced you in deciding on your career?
I don’t remember the day when I didn’t want to be in finance…..It is either in your DNA or it isn’t. PERIOD.
What, in your opinion, is the main characteristic of being successful in business?
Surrounding yourself with the best people you can find, delegate authority, and not interfere as long as the overall policy you've set for yourself is being carried out flawlessly.
What characteristic do you feel prevails in being successful in life (if different from above)?
If you’re looking to be truly successful and build real wealth, one thing you don’t want to ever do is go for something that sounds “sexy” or “appealing” without having the “total passion” for it. At the end of the day, you’ve got to be willing to sacrifice lots of years if you want to ever be a “master at the trade”. Overnight success is 15 years; and there is indeed lots of sacrifice involved in building a lasting and powerful brand. As Niccolo Machiavelli says it so articulately: “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.
Characteristic that best describes you: Action speaks louder than words
Favorite book: The 48 Laws of Power by Robert Greene
you do to get relaxed from the daily pressure? Hobbies, sports...How's your
life in the USA?
As they say, the best way to make happy money is to make money your hobby and not your God. Life in the US has been exceptionally good to me. Thank God.
What would you say, would be the main motto of Blackhawk Partners, Inc.
Blackhawk Partners www.blackhawkpartners.com is basically a private “family office” that focuses on originating, structuring and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and build-ups, and growth capital financings mainly in the global energy, services and technology sectors.
Our Mission is to generate significant capital growth through “global “ early stage investments in such companies and in trading petroleum products and financial instruments.
We basically work with those type companies to attract complementary skills to insure commercial success, to develop high margin products to address large growing markets, to develop business plans with significant milestones, to build investor syndicates to fund to positive cash flow and create significant "wealth" for all involved.
What makes us different than other private equity and venture capital groups out there is the fact that we don’t back ideas but rather operators with a track record of executing. There is a zillion ideas out there but only a handful of serial entrepreneurs who know exactly what it takes to take those ideas and “commercialize” them to the point of creating a significant company. Those are the kind of people we work with ….plus the fact that given our extensive relationships on a global basis, we have the ability and do open up doors for those companies with the highest levels of both the business and government establishments in those countries to market their products and significantly impact both their respective top and bottom lines.
Economic surveys point out that a "disproportionally" number of immigrants (and their descendants) get involved into business... Among the most successful community are the Lebanese. Do you have any personal explanation / sociological point of view?
Given Lebanon’s population of just 3.8 million, the success of the Lebanese in finance seems to want more of an explanation. Some point to the country’s long history as a Middle East trading centre, drawing the commercial ambitions of Christians, Muslims and Jews. But also at work, many Lebanese who have succeeded on Wall Street say, is the spirit to prevail in adverse and challenging circumstances, both at home and abroad.
Do you think the lending & credit crisis (and American / world recession) could negatively affect your investments?
Coming back from Davos, I keep hearing how cheap things such as stocks and real estate have become. “Buy now while prices are cheap,” is a common refrain now in most of the mainstream media. But what is cheap?
It appears that when the prices of assets have fallen by 10 or 20 percent, people think assets must be “cheap”! Of course, such prices are indeed relatively cheap. But are they really or absolutely cheap, when there is a risk that they may fall further in price? No! I believe things are only cheap when, on an absolute and realistic basis, they can be expected to rise in price. Then prices are truly cheap, sometimes even after a rapid rise in price.
In my opinion, most asset prices will now be reduced in price to a level that reflects the squeezing out of almost all the debt component of the price. In some cases that is a very large proportion of the present price!
We at Blackhawk find in fact ourselves a little shocked when considering the impact of such a conclusion — it means the prices of most assets will have to fall much, much further! Indeed, in our opinion, we are now witnessing only the beginning of a massive fall in asset prices as the world returns to reality, a world where the price of some stocks and other assets, even houses, will truly be cheap. Of course there will be exceptions. For instance, we feel that new, improved eating habits (rice, chicken and water being replaced by wheat, beef and milk), particularly in the Far East, will result in consistent and increasing new demand for soft (food) commodities.
I have always argued that the recession I predicted for America will cause a significant economic slowdown, in the very least, for the world economy. However, the demand for better food represents a very powerful, grassroots political demand. The governments of most of these countries are rich — very rich — and thus will have to ensure that their impatient, newly freed people continue to get the meals they now expect! But, for the rest, I see serious declines in price before there is enough “blood in the street,” so to speak, to make most assets truly cheap.
I foresee so serious a decline that any investor should, when urged by increasingly hungry salespeople to “buy,” ask themselves repeatedly: “Exactly when is ‘cheap’ actually cheap?” The answer is, only when it becomes reasonable to expect the asset to rise in price! An important point to remember here is that the prices of assets do not all move in unison as an economy transitions from growth to recession and vice-versa. One should thus be careful to judge each economic sector and asset class on its own merits. For example, Warren Buffett rightly sees blood gushing in the street of the bond insurance world. He possibly judges it too early to buy a mature, downgraded bond insurance company (loaded with a book of business that looks more like a can of worms). Better to leave that to the major banks and financial institutions, themselves embroiled in collateralized debt obligations (CDOs), to cobble together their own, self-interested rescue package! However, it may be a great time to form a new company, staffed by skilled employees (laid off by competitors), one able to charge new, realistic rates that reflect a depressed insurance market. Furthermore, it is a largely a matter of luck to hit tops and bottoms in price cycles, so one should aim for areas of mood change, not minor price shifts.
Bottom Line: Some investors will buy while blood is flowing; others will wait. Both are likely to be near enough to the bottom to make handsome returns. We at Blackhawk are positioned to keep creating wealth no matter what.
What do you feel was the turning point in your life, and why?
It was the day I realized that you will only get to the top, and stay there, by lifting those around you as you move up - not by climbing on them to get there first.
If you had your life over, would you do anything different, and why (if yes)?
I wouldn't correct anything because I wouldn't be where I am today without the mistakes of the past.
Where do you see the Economy going in the next 12 months?
My personal view is that the economy will continue to deteriorate sharply this quarter and next quarter and be pretty weak second quarter and maybe sort of see stability fourth quarter, and then I think you will have a pretty, and a weak 2010 although I don’t think it will keep declining. I think 2011 will show some growth but still be well below the levels of 2006 and 2007. My view is that you may not get back to 2006 and 2007 a long time because we have sort of an emotional and psychic shift going on in America which is back to basics don’t live on leverage, live within your means, more humble life styles, less extravagant consumption, savings and all of that sort of stuff. It is a fact that a lot of people in America are legitimately scared and have seen their life savings or what they perceived as their net worth largely either wiped out or cut in half. That’s going to forge fundamental behavioural differences and that will retard the growth.
What would you advise the “average” person to do?
Be a contrarian. Think outside the box. Don’t accept to be and stay the “average” person listening to all those pundits who don’t know better. Go and do your own research and learn in the process how to empower yourself.
What would your advise be, to the young Lebanese South African’s leaving school?
Think bold. Think big. Calculate. Use your head not your emotions. Dare. Once again, and as one of my favorite thinkers Machiavelli used to say: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its outcome, than to take the lead in introducing a new order of things”. Jesus Christ was in fact the biggest rebel of all and so is every billionaire out there. Buck the status quo and you will see your life turning for the better…this if you truly have what it takes.
Where do you see Ziad in the next 10 years?
I don't fantasize about those things....I am a doer not a dreamer.
What are your links / ties with Lebanon ? Are you involved in any foundations, associations ?
I am and have been a long time lobbyist and activist on behalf of Lebanon…..As a matter of fact, I am the Founder and President at U.S Committee for a Free Lebanon www.freelebanon.org ; a non-profit, non-sectarian think tank, founded in 1997 by 56 other Lebanese American activists including myself, to educate the American public as to Lebanon's strategic and moral significance as an ally of the United States and an outpost of Western values in the Middle East.
that the United States has vital interests in the Middle East and see the
region, with its profusion of dictatorships, radical ideologies, existential
conflicts, border disagreements, political violence, and weapons of mass
destruction as a major source of problems for the Free World.
Toward this end, we seek to help shape the intellectual climate in which U.S. foreign policy is made by addressing key issues regarding the region in an accessible way and for a sophisticated public. We also function as a resource for individuals and institutions seeking not only accurate and reliable information, but also new and fresh perspectives, combined with innovative and effective solutions, for Lebanon and the Lebanese people. Consequently, we serve as a vehicle to disseminate "intelligence" and "out-of-the box" ideas to institutions and policymakers in the United States and abroad that are capable of exercising political, economic, military or spiritual leverage to bring these abuses to an end and hold those responsible to account.
Do you feel nostalgic from you homeland? As your mind returns to your childhood / adolescence (if such thing happens to you!) what do miss most?
I am afraid I miss a Lebanon that doesn’t exist anymore; except in my fantasy. I am though confident that we in the Diaspora along with our partners back home will one day succeed in liberating Lebanon from under the Syrian and Iranian shackles. It is only a question of time and further resolve.
Ziad, thank you very much for your time, and we at Lebanese SA which you and your Family all the best for the future.
Thanks much for having me Eugene….Looking forward to staying in touch. God bless.