Prem Watsa, ‘Canada’s Warren Buffett,’ hatches plan to salvage BlackBerry

Prem Watsa
Fairfax Financial CEO Prem Watsa speaks at the company's annual general meeting in Toronto on Thursday April 11, 2013. THE CANADIAN PRESS/Frank Gunn

A central figure behind the $4.7-billion deal for BlackBerry is Prem Watsa, chairman and chief executive of Toronto-based Fairfax Financial.

Watsa, 61, joined BlackBerry’s board in early 2012 when Fairfax moved to become the Waterloo firm’s biggest shareholder, joining the board to help implement a turnaround plan.

He resigned in mid-August as Fairfax was circling in with a bid to take BlackBerry private.

Watsa was born in Hyderabad, India, and in 1971 completed his bachelor’s degree in chemical engineering from the Indian Institute of Technology. According to his biography as chancellor of the University of Waterloo, Watsa moved to Ontario in 1972 and later completed an MBA from the University of Western Ontario.

His early career saw Watsa begin work at Confederation Life Insurance Co. in Toronto, serving as vice-president of Confederation Life Investment Counsel from 1974 to 1983. He moved to vice-president of GW Asset Management and co-founded Hamblin Watsa Investment Counsel Ltd. in 1984 (which is now fully owned by Fairfax). Fairfax was born in 1987 after Watsa took over Markel Financial Holdings Ltd. and renamed it.

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Since then, his investment acumen in Canada is nearly unrivalled, while he’s earned the title ‘Canada’s Warren Buffet’ by making profits from bets on companies and market trends that looked ill advised at the time, but later turned out to be shrewd decisions.

Reuters reports Watsa revealed his “investment chops” by exiting the stock market ahead of the 1987 crash and buying Japanese puts — or rights to sell stocks at guaranteed prices — ahead of the Tokyo market’s collapse in 1990.

Fairfax entrenched its reputation for profiting from unlikely bets during the U.S. subprime mortgage crisis.

Investments banking on a crash in the U.S. housing market began to pay off in  2007, notching up gains for Fairfax, which booked billion-dollar profits in 2007 and 2008. Fairfax again made a killing by diving into stocks during a recovery in 2009.

Since then, Fairfax’s decisions haven’t  fared as well – Watsa’s bearish outlook for stocks has seen the company sit on the sidelines of a bull run that’s pushed markets to record highs in recent years.

Doubling down on BlackBerry may come to be seen as another blunder, analysts say.

But then again, maybe not. At Fairfax’s April meeting, Watsa said he was well aware BlackBerry’s fortunes wouldn’t be turned around over night – or even a few, according to Bloomberg.

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“Is it going to turn around in three months, six months, nine months? No,” Watsa said. “But if you’re looking four, five years…We make investments over four or five years.”

Read more: BlackBerry strikes deal to sell itself, go private

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