Naim Ali, CEO of Calgary’s SM2 Capital Partners, on immigrant success story

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Naim Ali, a next-generation member of a successful Calgary enterprising family, describes the long journey from the founders fleeing political unrest in East Africa to a successful and harmonious transfer of leadership of the family business.

How did the first generation in your family come to start a family business in Canada?

“The Ali family’s story started in a small village in Tanzania with two brothers, Shiraz and Mohamed Ali, and their parents, Fatima and Hussein.

Their lives began in extreme poverty as they lived and worked inside a small retail shop. However, through perseverance and hard work, they were able to send Mohamed to Nairobi, Kenya, and the United Kingdom for an education.

Shiraz and Hussein remained in Tanzania and built businesses in printing, manufacturing, and import/export industries. Unfortunately, in the early part of the 1970’s, their success was halted due to the political unrest of Idi Amin’s dictatorship in Uganda and the threat of persecution of non-African nationals in east Africa.

It was during this time that the family made the courageous decision to leave behind their businesses. They fled to Canada for peace and the hopes of a stable future.

In 1973, SM2 Capital Partners (the Canadian version) was created to fulfil a handshake deal to purchase the Budget Rent A Car franchise for Calgary.

Mohamed’s and Shiraz’s days began at the crack of dawn, as they opened and serviced rental counters and ended late at night washing cars. On weekends, the brothers would negotiate financing agreements, execute on fleet purchases, and assess new business opportunities.

Twenty-five years later, the SM2 Capital portfolio would be composed of Budget Rent A Car, parking lots in downtown Calgary and airport parking (Calgary Park & Jet), commercial real estate and hotels.

Almost fifty years later, and in the spirit of intrapreneurship, SM2 Capital is led by the rising generation of the Ali family, Naim Ali, Hafiz Ali, Jamil Ali, and Rizvan Bharmal.

We value our people as our company’s destiny. We have also led acquisitions and growth in different sectors, including insurance (Fortress Insurance Company), gaming (Cash Casino Calgary, Cash Casino Red Der, and Ace Casino Airport at YYC), and hotels in the United States.

Lastly, the rising gen oversees the Ali family office, and investments in real estate (such as greenfield developments, hotels in London and Paris, industrial warehouses across Canada, student housing, and senior care facilities), venture capital, private equity and public market securities.”

How did your founding family member’s experience shape your own values?

“I will always be grateful to my mother and father for the incredible influence each of them had on shaping my core values.

First, as hard as both my parents worked in their respective domains, they instilled in me the core value of kindness. Early in my life, there was a recognition of the existence of a melody of humanity, and that kindness was the backbeat of that melody.

Even as our wealth increased and their status elevated in the community, neither of my parents veered from kindness as a key aspect of their core value system. To me, they showed an authentic curiousness for the stories that people around them were compelled to tell them.

Second, my father taught us the value of courage. He bought and started businesses with limited knowledge and financing as a newly arrived immigrant in Canada. He learned how to lead a company and then became a leader in our Ismaili community. He learned to ski at the age of thirty on two wooden planks. These are but a few examples I draw upon that built a foundation around the core value of courage.

I leaned into this courage by exploring the world, creating relationships by opening my heart, taking chances down winding paths, connecting with people, and having tough conversations with my founders over the direction of our business. Courage gave me the strength to face my fears and celebrate the opportunities in business and in life.

Lastly (and I must admit that it me took me a long time to define this core value), my father always encouraged me to do my best.
It took me a long time to understand this core value because, growing up, I thought he was demanding perfection. I thought that that perfection meant him not tolerating my mistakes. And that really was not the case at all.

My father did his best in everything that he did, from how he treated his employees to how he conducted himself as a husband and a father. Going to bed each night and closing your eyes with the feeling that that you have done your best that day is an incredibly self-satisfying way to living a balanced life and being a good human being. That is the work ethic he instilled in me, to do your best, each and every day.

Each morning, when my six-year-old son and my four-year-old daughter leave for school, I ask them what are your intentions today? Their responses are based on our family motto: Be Kind, Be Courageous, and Do your Best. I hope this mindset helps our children live their best life, whatever path they choose. And I am so thankful that I can articulate how my parents acted in their own lives and pass those values down to their grandchildren. For my parents, passing down core values is the true definition of passing down wealth.”

What was it like growing up in a family business environment?

“Like many children in family businesses, my early memories of family time were going to Shiraz and Mohamed’s offices with my brother and my cousins. We played on their speakerphones (landlines!), pushed each other in circles on offices chairs, and scribbled ‘important memos’ on office stationery.

During a summer vacation, when I was 10 years old, I had my first job at Budget Rent A Car. I worked with the shift of employees that started at 6 a.m. to clean and prepare cars and trucks for rental. I never missed a day because it was exciting to handle all the equipment, from the gas pumps to the spray washers. I was also allowed to park the cars and trucks on the lot or drive them through the car wash.

As I got older, I remember feeling guilty or trying extra hard for others to like me when they would make a comment about being part of the [successful] ‘Budget Rent A Car family.’ I did not understand why I was sometimes singled out like that when other children were not identified by the work their parents did.”

When did you feel your own entrepreneurial interests start to take shape, and how did your family support you in your earlier years?

“After spending my education and the first part of my career away from Calgary, my entrepreneurial interests began to take shape when I returned to work for the family firm in 2010.
First, I was supported through my studies as I embarked on the Executive MBA at the Haskayne School of Business at the University of Calgary. Simultaneously with my EMBA, I was working for the family on hotel acquisitions in the U.S. Midwest and given all the related decision-making on our U.S. hotel acquisitions.

I was directly applying the lessons from my EMBA classroom (literally, overnight) to the businesses we were starting in St. Louis, Missouri. Looking back, I greatly admire Mohamed and Shiraz for trusting me to handle our hotel acquisitions in such a new and foreign landscape.

Often, I imagine that my journey in the Midwest may have been like what my father may have encountered when he first moved to Canada. The big difference was that Mohamed and Shiraz supported me with their decades of business experience. As well, SM2 would also write the equity cheques when I requested money to buy a hotel.”

How did your educational choices play into your business trajectory?

“Like many immigrant families, education was (and still is) a priority for my family. In addition to our undergraduate degrees, my brother (the Chief Investment Officer for SM2 Capital) holds a master in real estate finance from the London School of Economics, and I have a Juris Doctor and an Executive MBA.

From the outset, education was the tool that gave us the opportunity to create great relationships and to work in the global marketplace.
My brother spent over 15 years in the European real estate department with the Carlyle Group in Paris, Milan, and London. I learned the intricacies of secured debt, securitizations, and M&A by immersing myself in the corporate law departments of Wall Street law firms.

These experiences empowered us with valuable business experience and in an international setting. In dynamic environments, like New York and London, we explored the arc of a business deal as it develops its own structure and framework, from acquisition analysis to accessing capital markets to the management of assets. In fact, the careers that we started almost prevented us from coming back home due to the exciting nature of our work and the cities in which we lived.

There is no doubt that the experience was invaluable. However, the experience that I returned with was in direct contrast to my founder’s business philosophy. They were very much focused on the details of the operations of their individual businesses.

These two different perspectives gave our family great strength as we developed our strategic plans for the existing portfolio. We started having discussions around the trajectory of our existing businesses, how we would invest in new businesses, manage assets, and allocate new capital.

These were discussions that our founders had never had with the rising gen. These discussions really pushed everyone in the family to reflect upon what each of us wanted for our businesses and for us, as self-determined humans.

We became unified as a family that runs businesses and not a business that runs a family, but it was not easy. It took time and intentional conversations.”

What supports and training other than formal education did you find valuable?

“I cannot overemphasize the importance of peer networks and the Family Enterprise Canada organization (FEC) that helped us in the development of our business continuity planning. FEC gave us a safe space to learn from other family businesses and family offices. These conversations were with were with next gens, third generation or fourth generation family members who were key stakeholders in their own entities.

Through the FEC network, I had intentional conversations around how to mitigate business, financial, ownership, management, and family risks in business families. These conversations changed our business trajectory and the subsequent milestones that we are even trying to achieve today.”

Did you turn to any advisors along the way?

“In 2017, we held our first family shareholder meeting and our first family council meeting. We used advisors in the room for two full days to help our family, comprised of two founders and our cousin consortium (five of us), listen to one another.
This was extremely helpful because it laid the foundation for conversations that the Ali family could have around how the rising generation, or the next gen, was going to transition to the now generation.

It also helped our founders think about what their lives would look like as they transitioned to different roles and responsibilities in the business. After 45 years of being the key stakeholders in every aspect of the business, and their own self-identities being tied to the family business, Mohamed and Shiraz contemplated a re-wiring (not a retiring) of their own mindsets.

I believe that this would have been impossible to accomplish without the help of advisors, based on the complexities of family dynamics that naturally occur in families, which are only more magnified by the fact that we were all working together.”

Did you feel pressure to achieve, coming from a successful family business background?

“There has been an underlying current of pressure throughout my life with respect to what I thought was expected of me in my family business.
When I joined the family business, I felt that I was under the proverbial microscope. As a result, my decision-making framework came from a defensive perspective. Sometimes in meetings with my father, I would argue vehemently for positions opposite of his simply to prove that I had something to offer. This did not serve me well and created more pressure on me to perform. I was exhausted.

To ‘get it right’ for me, I had to re-align myself with my core values and change my mindset.

One of the best things I did for our family business was to join the CEO roundtable [TEC Canada], led by Lorna Johnston [founder of The Change Institute]. In my CEO peer group, I talked about the pressures that I was feeling with other CEOs and learned to leverage my own skillsets to become the CEO I wanted to be.

As well, this gave me the confidence to have difficult conversations around transition and leadership with my founders.

Often, the pressure on next gen leaders comes from a lack of communication between founders and the next gen. Both parties have expectations and if you don’t discuss what those expectations are, it is extremely hard to build the necessary relationships to define a strategic direction for a family business.

In addition, today I am very intentional about balancing my passion for leading our company with leadership development, my own family, playing sports, and spirituality.”

Do you have advice for next generations in enterprising families, whether they choose to be involved in their family businesses or start their own?

“In my life, I have been in positions of apprehension when I was not sure if my vision would be heard by my founders. Some of the worst decisions I made were those decisions that I made out of fear.

Whatever one’s choices are, whether to be involved in the family business or pursue interests outside, the only way that I know how to be seen and heard with respect to one’s own ideas and dreams is to intentionally open the lines of communication.

It has been fascinating to compare how I think a conversation is going to go versus how it actually goes in real life. More often the not, the real-time conversation goes much better than how I imagined it would.

One aspect with business (any business) is that if one is not interested or passionate about it, equity could be eroded to the point of destruction.

The hope I have for my children is that they follow a journey that allows them to leverage their own strengths. If that is outside the portfolio of SM2, that is fine. I believe that by following their own path they will build equity in their own personal balance sheets.

My hope is that the personal equity they build in themselves will empower them to impact the world with their own strength, power, and self-expression.”

Responses have been lightly edited for clarity and length.

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