- Players: Hina Kassam and Irfan Pardesi
- Company: ACM Gold
- Launched: 2005
- Turnover: More than R400 million
- Profit: R350 million
- Company Value: R3 billion
- Awards: World Finance Best Broker Africa 2013
- ARABCom Best Broker 2012 (Middle East and Africa)
- Contact: www.acmgold.com
Irfan Pardesi has never seen his father have money. His brothers and sisters have, but as the youngest child, his experiences were of his father losing everything – twice.
It’s not typically the kind of household that an entrepreneur would emerge from, where entrepreneurship meant tough times and a family struggling to make ends meet.
But for the youngest Pardesi, it meant something else: Survival. Growing up in Pakistan and nearing the end of high school, the young Irfan could have dropped out. His family could no longer afford to pay school fees, and by working he could help to pay the bills.
Instead, pushed by his sister Hina Kassam, who was married and living in the UK, he decided stay in school – whatever it took. He was good at his studies, and he wanted to get his A levels. “I started selling mobile phones to pay for my school fees,” he says, and his path to entrepreneurship began.
Wanted: Resourceful spirit
Today, Pardesi and Kassam run ACM Gold, a forex trading platform that spans international markets, and has a group turnover of R400 million, with very impressive profit margins. Launched in Pakistan, the business’s head office then moved to Dubai, before settling in South Africa.
“South Africa has everything we’ve been looking for. It’s a beautiful country, the climate is ideal, its banking sector is well regulated and trusted, and it offers all the skills we need,” says Pardesi. “We’ve found our home, and we have big growth plans.”
Having lived on three continents, the brother and sister duo have a good understanding of what they’re looking for. Kassam grew up in Pakistan, spent time living in Uganda and Kenya, and settled in London before moving to Dubai to head up ACM in the bustling UAE capital. While Kassam was in Uganda, Pardesi finished his A levels and was looking for a way to study in London.
“I had negotiated with my school to let me finish my A levels in one year instead of two. I needed to save costs. We were broke, there was a lot of unrest in Pakistan, and loans were piling up. I wanted to get on with my future.”
Getting his A levels didn’t solve any of Pardesi’s problems though.
“I would be the first person in my family to get a university degree, and they weren’t having any of it. My father had borrowed a lot of money, and my extended family expected me to start working as soon as I was out of school to help pay off those loans. I didn’t have permission to leave Pakistan to study abroad.”
But this was a kid who had paid his own school fees and finished his A levels in one year. He was going to get to London. The problem was that global events didn’t agree.
“I finished school in June, and started getting ready to leave for the UK. I’d told my family that I was going to Uganda for business. And then September 11 happened, and the British embassy in Pakistan closed.” There was no way Pardesi was getting a visa. The London School of Economics had accepted him, but he couldn’t get to the UK in time for his first semester.
Entrepreneurs are nothing if not resourceful. Their greatest strength is seeing an opportunity in every challenge, and finding solutions where others would give up. If he couldn’t get a visa in Pakistan, Pardesi would fly to Uganda. “Hina was living there and she had a friend in the UK embassy. I arrived in Uganda and they had arranged a British visa so that I could continue on to London.” Kassam had taken a loan and was able to give her brother £730 over and above the £1 500 he’d already saved up for his first term’s fees and living expenses while he found a job.
Becoming a specialist
Entrepreneurship is all about making it happen. Pardesi wanted to get his degree, and he needed to pay his way while also sending money home. In his first week, he secured a job at Starbucks, working 40 hours a week. But this didn’t leave much time for studies.
“I changed my schedule so that I went to university for two days, and worked five days a week. This meant skipping lectures that didn’t fit my schedule. I’d tried convincing the school board to change it for me, but they refused.”
Pardesi’s grades were good enough to qualify him for a scholarship in his second and third years though, and so when he graduated in 2004 he’d managed to not only save some money, but was living comfortably and still sending money home.
By this time, Kassam had moved back to London and was working in bank finance, and Pardesi secured a position at a boutique investment house that negotiated operational leases for aircraft.
“Our role was to find an investor, bank and carrier simultaneously, and then structure a deal. It wasn’t very complicated, but it was a highly specialised field that to outsiders looked scary and difficult. We were a boutique house, and yet institutions like Deutshe Bank and Goldman Sachs were asking us to value deals – and we could charge a premium price for our services.
Related: 9 Things Successful People Won’t Do
It was Pardesi’s first big lesson in business: Focus on what you know best. You don’t need to be a master of everything, you just need to know a lot about one thing. “We knew who we were, and we didn’t try to be anything else. It made us extremely good at what we did, and highly sought after in the market.”
It was also during this time that Pardesi was first introduced to currency. “We were advising our clients on currency derivatives and hedging of currencies, and an idea started percolating. I’d already learnt that as a specialised expert you garnered respect, and now I started thinking that as a ‘newbie’ if I wanted to launch something of my own, it needed to be in an area where my skills and knowledge were scarce, and I could make a difference.
“The obvious answer was an emerging economy.” Pardesi had saved $120 000 in bonuses and grown a seed fund as his idea continued to percolate, and then he suddenly found himself back at square one.
“My father had a liability of $160 000 and my parents needed me to come home. The money I’d been sending helped with living expenses, but hadn’t solved their debt.” The seed funds went towards servicing that debt, and by early 2005 Pardesi found himself back in Pakistan looking for something to do.
“My sole goal was to accumulate as much money as quickly as possible to launch the business I really wanted,” he explains. “I did this in a number of ways. My father had started a small property valuations company that I got involved in. I understood valuations, and we were soon on a panel assisting Pakistani banks with property valuations.”
He also started importing mobile phones, and partnered with a local teacher to open an HR consultancy. “I was scrambling. None of these businesses had the scope I was looking for. They did well, and we made a profit on two of them when we sold them, but I knew they had limited growth potential. I was looking for something where the sky wasn’t even the limit.”
These businesses were fairly simple to set up and run, with low barriers to entry, but in the background Pardesi and Kassam were busy on a different project. “While I was still in the UK, Hina and I had developed a habit of visiting brokers and CEOs of trading houses to see what they were doing,” says Pardesi.
Kassam, in particular, was looking for an additional income stream. “I wanted to start trading forex so that I could leave the bank, but first I needed to learn as much as I could.” They made contact with a South African company, Global Trader, that was operating in the UK, and became introductory brokers (IBs), earning a commission if they introduced traders to the online platform.
By the end of 2005 both siblings were in a position to launch a forex trading company. Kassam was trading and doing well, and had made good connections in London. Pardesi had saved $22 000 in seed funding, and had sold the businesses he was involved in. His plan was to move back to London and launch the business. The plan lasted exactly as long as it took to book a ticket, move back to London, and turn right back around and return to Pakistan.
“I had no business plan; I just wanted to hit the ground running. And then I realised that the money I had saved wouldn’t even last two months in London. I immediately turned around and went back to Pakistan,” he laughs, recalling the shock of realising the miscalculation.
Kassam stayed in London with her husband and family. She would negotiate the platform deals in the UK and Pardesi would set up the business in Pakistan.
Lessons learnt, and improvements made
The launch of Accentuate Capital Markets (ACM) in 2005 taught Pardesi his second big lesson in business: You can launch a highly successful business with limited funds.
“After saving and losing my start-up capital, and then saving up again only to realise it wasn’t enough, we needed to find a way to bootstrap the business. My aim was still to reach for the stars, but first we needed to start building a brand, earning a good reputation and securing a client base. We needed to start small to become big.”
The partners worked out a way to launch with limited investment capital. “Hina approached Global Traders and negotiated a deal with them. She was already a client of theirs, plus we’d been IBs for their brand for over a year. They knew us, and we were always aware of how important relationships are in business, so we’d fostered the relationship we had with them.
“We told them we’d be trading in Pakistan and getting them new clients in an emerging market, but we needed their platform for free. Their model was to charge monthly minimums to businesses that used their platform, but we couldn’t afford those fees, so this negotiation was essential to the success of our start-up.
“All trades would still go through their offices in London, and they’d make the commission, of which we took a small percentage. We were working off low margins, but we needed the platform to get started, and eventually they agreed. We were in business.”
Once the deal was signed, Pardesi focused on securing great office space. “Our fees were small, so we needed to focus on volumes. This meant having a good office that people could visit, meet me and the dealers, and feel secure depositing their money with us. Our primary investment went into that first office and securing a few dealers.”
Pardesi had promised Global Trader 400 to 500 new clients each month, which was one of the reasons they had agreed to give them the platform without charging fees, and they now had to deliver. “We’d convinced ourselves (and them) that Pakistan was a new market with endless opportunities and no real
The reality turned out quite different. Growth was extremely slow. Pardesi kept the business lean, and they achieved break-even in the first month, thanks to existing clients and contacts, but they were nowhere near their target of 500 clients.
“I think one of the single biggest lessons I’ve learnt in business, and one we’ve carried through to every decision we’ve made since, is the importance and power of localisation,” says Pardesi. “Entrepreneurs are problem solvers. That’s what we do. But that doesn’t mean much if you’re trying to solve a problem that’s not your target market’s main concern.”
ACM was following the model of a broker based in the UK who does business online. It worked very well in the established UK, US and European markets, but not in Pakistan’s emerging market. “Online trading wasn’t embraced. Even though we had dealers that our clients could call, and white papers we distributed to educate our market, the model just wasn’t taking off.”And then Global Trader went bankrupt. It was completely unexpected as the business had been growing.
“We needed to regroup and re-evaluate what we were doing. It’s never nice to see a business go under, especially one you have a relationship with, but it did force us to change our model, this time with a much better understanding of our market guiding us.”
The secret of localisation
First, Kassam started negotiations with online platform providers that centred on a more holistic partnership. The reason was two-fold.
“Previously, we only hosted the platform and provided on-the-ground support. All accounts had to be set up through our UK partner, and approvals took up to a week and a half. This time delay meant people couldn’t start trading immediately. It also meant that they were essentially doing business with two companies – us and Global Trader, which could become confusing, and all trades were done in foreign currency.”
Kassam’s negotiations with a new online trading platform resulted in a very different business model. The platform was white labelled, so all trades were conducted through an ACM-branded site, which meant the client had only one point of contact. ACM also had power of approval, which meant they could approve new clients and get them trading immediately.
Their next big change was to localise trades. For the first time in the global trading environment, ACM offered a local trading denomination for gold.
“The subcontinent’s gold measurement is the tola. Around the world, gold is traded in US dollars per ounce. We allowed trades in rupees per tola, and did the conversions ourselves. It was a small change that Hina negotiated, with huge ramifications. No one had thought of localising trades. It wasn’t rocket science, or even difficult to do, but it meant our clients could trade in a denomination they were familiar with, and it made a huge difference to their confidence in their own trades, and our platform.”
The third big shift in the business model was focused specifically on how their clients traded. “Our dealers were extremely busy as clients would rather call them and have them make the trades than do it themselves online. They also liked dropping in to the office, and those who did so traded more frequently and for bigger amounts. They loved our environment.”
Armed with this knowledge, Pardesi made a decision that would never have worked in London. He cancelled his sales and marketing budget and redirected everything towards creating a physical trading environment that people wanted to be a part of.
“We had no sales consultants, but we did have three cooks, for example,” he says. “Clients could walk in day or night and order a drink, food – we even had staff who could run errands for them – all for free. We wanted them to feel at home. We were no longer trying to change the social behaviour of our clients; we were adjusting our model to suit their behaviour.”
Soon, clients started bringing friends. It was a lively, social atmosphere where everyone was pampered. “There was something about the energy of the trading floor that they loved. You walked in and you were immediately a part of something special.” Pardesi’s brother, who is a real people’s person, also joined the business, and the company finally started seeing the volumes it had hoped for in its first year, with turnover growing tenfold.
Spreading too thin
By 2007 Pardesi once again started feeling the itch for growth. Their office was doing well, so what was next? “We opened an office in Cyprus as our foothold into the European market, but we soon realised that while we understood the Pakistani market, the European market was very different. We just weren’t making any headway.”
In early 2008, a third office was opened in Dubai, which had a similar environment and structures to those in Pakistan, but real growth still evaded the brother and sister partnership. “We had lost sight of that key lesson: Localisation,” says Pardesi. “We were trying to branch out when we had a model suited to the market we were already in, based in a city of 21 million people! What about opening more offices in the area where we already operated, and had proven our model?”
Pardesi and Kassam now started actively concentrating on a model that had originally brought them into the industry – that of paying commission to local IBs who introduced new clients to the platform. “Each IB could open their own local office based on our model, work off our platform and use our systems. It meant owner-managers across the region were promoting and growing our brand, while building sustainable and profitable businesses themselves.”
It was the start of Pardesi’s realisation that their business model didn’t only help people trade, but also created wealth for local business owners.
“We’ve created many dollar millionaires over the past few years, and we’re proud of that. We don’t charge a minimum, because we got our start that way, and we share a percentage of the commission.” By late 2009 there were 277 offices spread across Pakistan all based on Pardesi’s model and using the company’s own system, which they built between 2008 and 2009.
“Building our own platform was the next logical move. We’d saved up the business’s profits and wanted to create a platform that had the capacity for thousands of simultaneous trades, was highly secure, looked good and was easy to use – and we could hire top international talent to help us do it.”
It was also a business that benefited from the recession. “This helped our growth in two ways. First, people wanted to be in control of their money, which made online trading desirable. Second, in a volatile market, gold prices go up. It’s seen as a long-term, stable commodity. We re-branded as ACM Gold, and focused on this market. Our trade in local currencies and denominations enhanced our success.”
By 2010 expansion was back on the cards. Dubai’s office was doing nicely, and ACM Gold now started eyeing India, which had a similar environment to Pakistan. Pardesi had also opened offices in Malaysia, Macedonia and Slovenia, and began the process of disinvesting from these markets.
“We wanted to grow, but recognised that these markets didn’t want the model that we were so good at. While we realised that we might have to change the model to reach our next level of growth because business is about adapting with the times, it wouldn’t be in those areas.” So where was the next opportunity? The answer was easy – Africa.
The move to South Africa
Pardesi and his wife had honeymooned in South Africa in 2008, and at the time she made him promise that they would return to the rainbow nation. Two years later, that time had come.
“We recognised the huge potential Africa had to offer. We’re suited to emerging markets, and we’d already learnt that localisation works. If we wanted to expand in Africa, we needed to operate locally. South Africa was the perfect fit.
“It has a well-respected Financial Services Board, is one of 11 countries that understands forex, and has a highly trusted banking environment thanks to strong regulations. We knew that people would be comfortable sending their money here, and trading through a local platform.”
Pardesi had also opened offices in Madagascar, Uganda and Kenya which readily accepted ACM’s tried and tested model – but South Africa didn’t.
“It was a big reminder that you can’t make assumptions about a market until you’re physically operating in it,” says Pardesi.
“We had country managers in our satellite offices around the world, and Hina was splitting her time between Johannesburg and Dubai. We had closed most of the Pakistan offices and had handed them over to local brokers. We had a big deal pending with the Pakistan Exchange, and we wanted to concentrate on our growth in Africa — but we just weren’t getting it right.” Then Pardesi realised their error. South Africa may be classified as an emerging economy, but it also resembles Europe. It needed a different kind of localisation.
“South Africans understand forex in a way that many other nations don’t. Everyone has grown up watching how the rand is faring. We quickly realised that South Africans don’t want to be involved in anything they don’t understand. They won’t trade unless they know how the system works and what they’re doing. If we wanted to do well in this country, we needed to cater to this specific need – we needed to educate our market.”
Where Pakistan and India were happy to trade with the advice of their dealers and wanted a social trading floor, South Africans are comfortable trading online, but want to be educated before they do so. As a result, ACM Gold invested in UFG (University of Forex and Gold), a training platform designed with the assistance of Adriano Tabasso, through which they could begin training people.
While this is steadily growing into a comfortable secondary revenue stream, its original mandate holds true: To create a market for ACM Gold by educating the public. “In many ways, South Africans are like Europeans. They don’t want to trade as a hobby, they want to trade full-time, and this takes a keen understanding of the market.”
The fact that ACM’s platform can be localised is a plus point, as all trades are done in rands and dealers can assist their clients in their own language. “We added Kruger Rands to our offering because South Africans understand and are comfortable with them,” adds Kassam.
Pardesi returned to his IB model. “I made a point of attending franchise expos and approaching local brokers. We needed to bring re-sellers on board, and we had a model that made sense. We’re based in South Africa – when you deal with us there isn’t a boss or platform that is operating overseas, everything is here, in local currency. Decisions can be made quickly, and all support is easily available.”
Consolidation for growth
By 2013, the market had grown and changed enough to warrant a relook at the original online model. “The Internet and consumer comfort with online models and trading has come a long way in the last seven years,” says Pardesi.
“We were buying back offices in Pakistan that we hadn’t already closed, and consolidating the business out of South Africa. We can have clients around the world trading through our online platforms now, so the local office model is no longer relevant.”
Today, there is only one small office in each of ACM’s regions with trusted local partners supporting the online trading platform. “If the market isn’t yet comfortable with online, we don’t look at it. We’ll wait two years and they’ll come to us via our online platforms, based in South Africa.”
- Focus on what you know best. The best businesses aren’t masters of everything — they’re specialists in one key area, and invaluable to their clients as a result.
- Even big brands start small. You don’t need millions to launch a company. Make some strategic partnerships that everyone benefits from, start small and be patient.
- Localisation is everything. You can be a big, multi-national company, but always take the current, on-the-ground clients into account. Design your business offering with their needs in mind. What works in one market won’t necessarily work in another.
- Shift the business when the market changes. Don’t hold onto something because it worked well in the past — times change, move with them.
- Don’t make assumptions. You’ll only understand a market once you’re actually operating in it. Launch your business or local office, but be prepared to shift your model as you learn about the market and what it wants.
- If your business allows, build a network of re-sellers that believe in you and your products, and help them achieve their goals — you will automatically achieve yours.
- If you want to get the best out of people, appreciate their efforts lavishly and give them a path to grow and prove themselves. The bigger the dream, the more important the team.
- If everything seems to be under control, you’re not going fast enough.
Trading + Gaming = Traming
Pardesi’s latest project is traming.com, an android app that merges trading with gaming.
“Traming.com has been created to give everyone easy access to the financial markets,” explains Pardesi.
“The concept emerged from the understanding that in this age of simplification, people are constantly looking for quicker, simpler ways of doing things, and in that vein, even online trading was still too time consuming. I wanted to develop an app that made trading fun, quick and easy.”
With Traming.com, users can decide what direction the market will take in an allotted time frame. Will it be up or down in the next 60 seconds? Get it right, and you’ll see up to 85% return on your investment — within 60 seconds.
“These trades are available on most global asset’s including currencies, commodities and shares,” concludes Pardesi.