As part of my series about the “How to Navigate and Succeed in the Modern World of Finance,” I had the pleasure of interviewing Khalid F Howladar — Innovation Angel & Board Member.
Khalid Howladar is the Chairman of MRHB DeFi, the world’s first ethical and faith-based decentralized finance platform. In addition, he is a Senior Managing Director and Head of Credit & Sukuk for R.J. Fleming & Co. the boutique merchant banking advisory of the Fleming Family.
With his rare mix of financial, tech, social and faith driven perspectives, he is a recognised authority in his fields and has addressed investors worldwide as well as audiences at the World Bank, IMF, ECB and IIF. Khalid is also an active innovation angel, advisor, and board member for a diverse mix of fintech, crypto, EdTech and Islamic Economy start-ups through his firm Acreditus Partners.
Khalid gained industry prominence from his 15 years at Moody’s Investor’s Service London and Dubai culminating as both Global Head — Islamic Finance and Head of the GCC banking team. He was also a senior member of the GCC sovereign committee following senior roles covering securitisation and structured credit in London. His most prominent start-up role was as Angel & later Chairman of Small Pharma, a pioneering psychedelic UK biotech that successfully made the transition from startup to a public 2021 listing on the TSXV Canada during his board leadership.
At Moody’s he was responsible for rating a diverse portfolio of around 60 conventional and Islamic financial institutions plus global sukuk issuances. He was both a Credit Committee Co-Chair for the European, Middle East & Africa Banks. Khalid was also an analyst in the structured finance team responsible for rating a diverse, $150 billion mix of GCC securitizations, leveraged loan, synthetic, high yield, asset-backed CDOs & CLOs. Previously Khalid spent four years at Credit Suisse in the Emerging Markets Risk team in London.
An engaging orator, he has provided over 100 briefings on both regional credit markets and Islamic finance to EM Investors such as the BlackRock, Fidelity, AIG, Threadneedle, Ashmore, ECM, LIM, Goldman Sachs, JPM AM, Franklin Templeton and BlueBay the amongst others. His research and views have often been quoted by the FT, Bloomberg, Reuters, WSJ, The Economist, CNBC Arabiya, and other media outlets.
He is an active LinkedIn influencer and a well-respected speaker at conferences with his passionate and dynamic style engaging audiences at the most senior levels in globally for institutions such as the World Bank, IMF, ECB, IIF, IsDB, AMF and the IILM.
A keen writer, Khalid has authored numerous research pieces across his career and works closely with Academia. He has lectured students in Dubai (Edinburgh, London, and Cass Business Schools), Abu Dhabi (Paris-Sorbonne and New York Universities) and Lisbon (Nova Business School) in Islamic fintech, risk, ratings, banking and sukuk finance.
Khalid holds an MSc in Finance from London Business School, an MSc in Advanced Information Technology, and a BEng in Software Engineering both from the Imperial College of Science and Technology and Medicine.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Up until five years ago it was pretty straightforward, two decades of blue-chip institutional roles — EM Risk at Credit Suisse in London and then a series of leadership roles in credit markets at Moody’s in London & Dubai culminating in the Global Head of Islamic Finance & Middle East banks.
Then things dramatically changed as I took the plunge into entrepreneurship by setting up my own ratings and risk consulting firm — Acreditus. It’s at this time I also started actively investing in startups and developed a ‘portfolio career’.
My institutional advisory practice became part of R.J. Fleming & Co, a reincarnation of the 150yr old British merchant bank but my start-up passion took me from being a passive investor to more of a venture builder. Through Acreditus Partners I’ve now invested in 13 start-ups — with innovation and impact being a broad theme.
My eclectic portfolio covers businesses ranging from EV Crypto and Halal Defi to Psychedelic Depression biotech and foodtech. I often take active advisor or Board roles in many firms focused on governance strategy, risk and helping institutionalise the business and take it to the next level.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Hmm, I honestly can’t think of something funny right now — but one key lesson was not to over invest in a rigid business plan. One faces so many unexpected changes so strategic flexibility is key to survival and success. I ended up advising both sovereigns to start-ups in the same firm — inconceivable when I started!
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
The Bitcoin Standard / Saifedean Ammous. I had a ringside expert seat at the Global Financial Crisis while working at Moody’s. My expert knowledge of debt markets and banks, coupled with (i) the post crisis central bank responses of money printing, (ii) the ongoing damage to society and (iii) rising inequality got me interested in cryptocurrencies as a solution to the government abuse of money. So many different complex ideas were brought together clearly in this [audio]book and since then I’ve made it one of my core objectives to support initiatives and start-ups that have some kind of cryptoasset or decentralised impact theme.
Are you working on any exciting new projects now? How do you think that will help people?
MRHB DeFi — a global gamechanger aiming for one billion+ faith-based, unbanked and crypto-cautious communities excluded from the current growth and wealth opportunities of the cryptoverse.Unlike most (if not all) other DeFi projects we put ethics, faith, community and governance at the heart of the platform. We are building an entire ecosystem of products that excludes all forms of debt and lending to focus on peer-to-peer trading and investment opportunities. We hope this crypto ‘safe-space’ will change the world of DeFi although true decentralisation for the masses will be tough until we can come up with effective solutions for anonymised/decentralised AML/KYC etc. These issues need to be tackled if we are to go mainstream and engage the four billion adults who are currently excluded or avoid cryptoassets.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Going bank to MRHB DeFi I must first clarify it’s not my company, but I have an active leadership role as Chairman, and I have been key in creating our ‘purpose’. For any new project with such an ambitious vision it’s important that our diverse and decentralised team are fully aligned — if not then dissension and debilitating operational friction is the result. Indeed, it took our Founder & CEO time to identify all the right team members who could work together. Also, purpose-driven teams are not as focused on material objectives and can better weather some of the bootstrapping that invariably occurs with early stage firms.As for the vision itself — well CeFi has failed a lot of communities globally. Most countries use debt-addicted consumption to drive growth, global money printing (or quantitative easing) is hurting those on low and middle incomes while further enriching those at the top. Indeed short-termist politicians continue to fail their citizens… given the ongoing failure the time is right for a DeFi system that empowers people to build true wealth and prosperity via a peer-to-peer system. However, for any such system to get maximum retail access and success — it needs to address important challenges around consumer protection, KYC and AML.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
I have two — meritocracy and teamwork strength,
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
For us the community is the most important long-term success driver. Its cliched but social media channels, telegram primarily but twitter, YouTube, etc., live engagement via AMA has proven to be highly effective we have gathered over 15,000 members for our TG channel in only three short months!! The community cannot wait until the launch of our token round next week (7th October)
If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
I would recommend bootstrapping until at least the first value inflection point Then — ideally when you are in need of growth capital — find a VC with a strong track history in your space coupled with a good personality/culture fit. Better to have a small piece of a big pie vs big piece of a small one — but remember for them you are but one of a portfolio of high ‘failure’ rate firms so they are comfortable to push for more rapid high risk growth, whereas for you it’s your only firm — best be a bit more cautious.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
Pre-revenue, recent peer comps are probably the best metric to apply — especially given the impact of qualitative and market factors that are difficult to model. Once more established then cashflow modelling, market sizing etc. become more meaningful to any valuation. Beware of false precision and always run multiple scenarios with stress variations in your key risk variables and business to understand a full spectrum of outcomes.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
Well, it may sound obvious you need to do an objective assessment of the cause. That in turn will drive the strategy to revive growth, there is no silver bullet to growth issues.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
Running out of cash. Ensure early team are aligned with equity incentives AFTER performance KPIs is either known or demonstrated. Beware of ‘expensive’ individuals who have not yet to demonstrate value — mutual probation periods are recommended to test for compatible human capital.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Human Capital Quality/Talent
- Common Vision/Goals/Purpose
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Ensuring you are passionate about what you do and work with good supportive people. After that — then disconnected holidays!
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
Together with the MRHB DeFi team — I’m doing it — ethical DeFi movement. This can genuinely improve financial empowerment in excluded communities — particularly those in emerging markets and provide a complementary alternative to the CeFi system that is failing many in the world so badly. We should drive the construction of a true and ultimately and hopefully autonomous peer-to-peer financial/economic ecosystem. Then can be multiple systems of course.
How can our readers follow you online?