Why AI-Built Models Get Investment at Much Lower Rates and What to Do About It with Taimour Zaman
In this episode of Financial Modeler's Corner, host Paul Barnhurst sits down with Taimour Zaman to discuss why AI-generated financial models often fail to convince lenders, what investors really look for when evaluating financing opportunities, and how financial modelers can build more credible models by focusing on risk, capital protection, and realistic exit strategies.
Taimour is the Founder and Chief Capital Strategist of AltFunds Global, a financial advisory firm with offices in Canada and Switzerland. With more than 11 years of experience, he has advised operators and project sponsors on structured finance transactions ranging from $1 million to $500 million. He has developed 13 structured finance programs and built a network of more than 900 brokers.
Expect to Learn:
Why AI-generated financial models often fail to meet lenders' expectations.
The three critical factors investors look for: capital protection, returns, and exit strategies.
How to approach financial modeling from a lender's perspective rather than a borrower's.
Why geopolitical risks, currency fluctuations, and unexpected events matter in financing decisions.
Here are a few relevant quotes from the episode:
“Put yourself in the lender banker's shoe. Know and understand the world is full of shocks and surprises and build me a model that protects and manages my risk.” — Taimour Zaman
“So it's AI assisted model building rather than AI building the entire model.” — Taimour Zaman
Taimour explains that a strong financial model is not simply about projecting growth or presenting impressive numbers. It must demonstrate how investors can protect their capital, receive their expected returns, and recover their investment when things do not go according to plan.
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Disclosure: Portions of this episode (such as the introduction or promotional segments) use AI-generated voice narration that has undergone human editorial review.
In Today's Episode:
[00:00] - Trailer
[06:16] - Taimour's Journey Into Structured Finance
[10:34] - Real Estate & Alternative Financing
[16:55] - Building Models From an Investor's Perspective
[19:57] - Managing Risk & Exit Strategies
[22:20] - What Lenders Look for in Financial Models
[27:17] - Real-World Financing Risks
[32:14] - The Right Role for AI in Modeling
[36:00] - Rapid Fire & Closing Advice
Full Show Transcript:
Host: Paul Barnhurst (00:35):
Financial Modeler's Corner is the world's premier modeling podcast. It is brought to you by the Financial Modeling Institute, the world's leading financial modeling accreditation organisation. Welcome to Financial Modeler's Corner. I'm your host, Paul Barnhurst. In this podcast, we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling. That's why I completed the Advanced Financial modeler and I've partnered with them, big fans of what FMI is doing. So check that out. Go ahead and take it if you haven't, but let's get onto the show. This week I'm thrilled to welcome the show Taimour Zaman. Taimour, welcome to the show.
Guest: Taimour Zaman (01:27):
Thank you so much for having me, Paul.
Host: Paul Barnhurst (01:29):
Excited to have you. So let's jump in. Worst model ever. Tell me the horror story.
Guest: Taimour Zaman (01:34):
So first of all, I run a global financial advisory company and we do something called structure finance. So typically when a borrower wants to go to an institutional lender, they will come to us to help structure that finance. One of the things I've noticed, especially in the last year, is how many people use AI to create what you call financial modeling. And they think people like me or the lenders are idiots. I also help provide some liquidity to lenders. So I also see the models that they put together for sweater finance. And now I've seen so many of these AI generative financial models that the minute I see and I know this is now I don't even have to ask AI, is this AI character? Just from all the ones I've seen, I go, oh man.
Host: Paul Barnhurst (02:22):
I bet. So I'm curious, we'll get more into your background. What's the telltale sign to you at this point? What are the one or two things that you open up and go, okay, this was generated by AI?
Guest: Taimour Zaman (02:33):
Telltale sign, if you're an experienced operator, you know everything there is about your business and I promise you, you will know more about your business and what you do than AI does. So in my area of business, telltale finance, there's some domains that we have some deep expertise in. Unless the real estate would be as one example. So real estate investing, research development projects. And so when you give me a generic AI-driven financial model, telltale signs, how the document is being printed out. If you're using Cloud Cowork as an example, it's very clear this is a Cloud Cowork something. If you're using ChatGPT and using some specific prompts, the way language is it, it's just so crystal clear. I don't have a, this is a telltale sign specifically, but if you're using Rock or ChatGPT or Cloud or I think the other one is something called Copilot, something like that.
(03:30):
I apologise, I'm not familiar with all of them. Yeah, Copilot was the other one. It's just the way they publish copy, if I can say that way, especially financial models, any one of your listeners can go and take whatever model they have and give it to different AIs and it can see how it publishes it differently. And I don't have a specific telltale, but other than, oh, this one was done by Grok, I can see this one was done by Grok kind of thing versus, oh, Kohberg does a really good job of making it look pretty. Oh, this is a Klout Cowork something. Now, everybody doesn't do that, thank God for that one.
(04:07):
But any of your listeners who's been doing AI using AI will probably tell you it's not very accurate. And so if you sit down and tell me, yeah, we have a development project in Arkansas and we are growing 0.5% a month or a year, something like that. Well, I know Walmart is based in Arkansas. I would know that because we do a lot of financing around structured finance and I know that they're investing billions of dollars in Walmart's business attracting hundreds and thousands of jobs in Arkansas. Give me nonsense numbers because I know the domains that I play in doesn't help. It's a waste of your time. For sure, it's a waste of my time and it doesn't help the objective to be accomplished.
Host: Paul Barnhurst (04:52):
I think it's interesting you mentioned the models you're seeing. So what's the approval? I want to get a little more on your background, but what's the approval level on something that you see of AI? How often do you see something where you say most of this was generated by AI and you're like, "Yeah, this is something I want to invest in."
Guest: Taimour Zaman (05:07):
Probably less than 2%. And by the way, so my industry is, I apologise, it's very similar to the porn industry. You collaborate with your competitors, if I can say that way. And so I don't like to - I don't
Host: Paul Barnhurst (05:20):
Know if I ever thought we'd discuss porn on a financial modeling podcast. There you go. Love it. This is a first.
Guest: Taimour Zaman (05:28):
But my point is that my industry, although there are firms that I compete with, we also collaborate on various projects. And so that 2% is even really, really high. And my competitors will tell you the same thing. The minute they see AI generative stuff, it feels like you're trying to scam me. It feels like you're trying to lie to me. That's the experience that I have. Anybody who's experienced at what they do, like a serious operator, they know their numbers far better than AI or a third party consultant, and they will write you models with crystal clear, crystal clear, this person, this organisation knows exactly what they're doing, why they're doing it, and they know the numbers very well.
Host: Paul Barnhurst (06:16):
Really interesting. I want to go a little deeper here, but let's get a little bit of your background for our audience. So tell us, how did you end up doing what you're doing where you're reviewing a lot of models rather than building them, you're finding out? Give us your background.
Guest: Taimour Zaman (06:30):
Yeah, for sure. So about 30 years ago or so, I was a consultant, marketing consultant, and I bought a Kool-Aid called If Yo Invest in Real Estate, you're going to retire for the rest of your life. So I bought that Kool-Aid and I started to spend a lot of time and money doing very expensive real estate investing courses. And so one of the things I learned about... By the way, all of those courses are all amazing. There's one fine fine statement that they don't market to you, and that is if you want to get rich in real estate, you got to be able to know how to raise money using other people's money. It's called a model, it's called opium. I hate asking people for money and I suck at it. So not only do I hit it, I also suck at it too. So you're
Host: Paul Barnhurst (07:21):
Saying you didn't get rich quick from that?
Guest: Taimour Zaman (07:23):
I did. Yeah, for sure. And I did all the courses thinking, oh, this guy's going to teach me something different about multifamily or whatever it was, commercial developments. They're all at the bottom should say, by the way, to be successful, whatever I'm teaching, you have to be able to raise money from people. So what I did was I set up a family office and I brought in my friends and family. I said, "Here's the family office and here's a common vision that let's go raise money to do all these projects." One person in my family office acquired a contract with FDIC in the US, and the merit of the relationship was for us to buy three to 400 properties a month, not a year, a month. And in exchange for that, we would get 30 to 70% off the listing price. So if you want to invest in real estate, you got the machine and you just have to know how to service the machine.
(08:19):
So I started to knock on doors, investors sold private equity doors at that. And I was trying to do something called, it's a term, and by the way, you can Google this and you can buy a book about it called How to Print Money Out of Thin Air. Because to buy that much property, I need to have a machine to press some money can be printed out so I can do the deals. And in that journey of how do you find money out of thin air is when I discovered this whole new world called alternative financing. And then over a very short period of time I said, "Alternate financing speaks far more to me than real estate because I don't have to deal with raising money and I want to do this thing called alternate financing." So now I'm in year 12, at least 12 for sure, where I do structured financing, I do it around the world.
(09:12):
So I meet cool, cool people all around the world with creative structures, creative ideas, creative projects, and then banks and private equity firms and the role of Wild Wild West.
Host: Paul Barnhurst (09:25):
Got it. No, I love the trying to raise the money. Yes. Real estate, flipping houses, whatever, all those get rich. You have to have the money to do it. I think you'll appreciate this. I remember when early 2000s, before the collapse, people when interest rates were fairly low and I know people that are pulling out all their retirement money and trying to flip houses.
Guest: Taimour Zaman (09:51):
Yes. I'm
Host: Paul Barnhurst (09:51):
Like, okay, 2008, all of a sudden all those people are like, "What have I done?"
Guest: Taimour Zaman (09:57):
Yes. Let me tell you, this is not real estate talk, but I just want to tell real estate is a forgiving business. So even when you buy a property maybe above market value, if you give it five, seven years, it goes back up. So it's a forgiving business. That's just my experience of it.
Host: Paul Barnhurst (10:15):
Which makes sense. Generally everything comes back. It's like the stock market or anything, can you hold it while your position's wrong? That's usually the challenge. You can at least get your money out.
Guest: Taimour Zaman (10:28):
Right, right.
Host: Paul Barnhurst (10:28):
Although the stock market, it can go to zero. So real estate rarely does... There's almost no situation where it's going to zero.
Guest: Taimour Zaman (10:34):
100%. So I'm going to talk about financial modelings and I want to give you two stories if I may. The stories, but financial modeling would work on it. So I run a very discreet private master group or masterclass for my memos on how do you buy US-based businesses without using any of your money. So if you want to buy other businesses that speak to you that's in your industry, I have a programme, but I'm not marketing a programme here, so don't hear that way. I don't even want to give you the name of the programme, but I run a programme that says, "Hey, if you want to buy a business and grow and it has to be a cash producing business, can be an idea you have. I want to teach you how to buy that business without using your savings account. Would that be of interest?" And so at any given time in my mastermind, I'll have six to 36, somewhere in there, a number of participants we're in a mastermind with that.
(11:39):
And as part of that journey, they have to go looking for businesses that are in their niche that they want to acquire. And guess what? They have to do this thing called financial modeling. And in the new world of AI, do you know how many lazy people let's say, "Oh, AI, I want to buy whatever it is." Let's say in your case, a podcast business, go and write me the business plan. I have stories and stories and stories. So that's just one version of that. I want to tell you why AI doesn't do what you want it to do. And in that case, I want to tell you a different story if I may. So I'm going to go back to real estate in Arkansas because that's a domain, one of the seven domains that we have expertise in. So I have a client in Arkansas who's a developer and he's always looking for money because if you're a real estate developer, the more money you have, the more you can build.
(12:33):
The problem in US, Canada, some other places around the world is let's say you want to build a commercial building or some kind of a building and you need $30 million as an example. When you want to go buy the land, the land is 10 million. And then you go to the bank and you say, Mr. Banker, you may put on your nice shirt on and you go, Mr. Banker, I want $30 million. And Mr. Banker says, sure, no problem. What's the collateral you're going to give me for the $30 million loan you want?
(13:06):
Well, there's this land, it's 10 million. Okay, so then I'll give you five million. The bank will give you five million on collateral of 10. So if you default, I can go sell the net, liquidate the land, pay for all the expenses for taking you to court and liquidating it, and I get my five million plus some return back. You may say, but I don't need five million. I need 30 because once I buy the land, I have to hire labourers, materials, construction, build, permits, all that stuff. So that's the story. So we come across a lot of real estate developers who have that story. I'm here to get some alternate financing because my bank doesn't do what I want to do and I don't have a list of 10 million investors, so can you help me out? So in me helping you out, in my company, Alfons Global, we register in Canada, Switzerland.
(14:02):
And so one of the things I do is I take people to Switzerland. It's one of the most regulated in the banking industry, the top tier world is Switzerland. And I set up a structure in Switzerland where that structure takes over the assets that you want to build and buy. And we issue something called CLN, but I won't bore you with CLN. It's like a coupon in a way that we list in three different exchanges, Luxembourg Exchange, Swiss Exchange, and the London Exchange. And through that, I'm able to raise money through the markets and get all the financing that developer needs for that particular project. The reason I'm sharing that story is because AI doesn't think that way, doesn't have the experience of doing that way, the model of that way. And then you asked me the question, what's the telltale sign? The dumb ass ideas I come up with it.
(14:57):
If you are a developer, and I don't want to pick on Arkansas, any other city you want in the world, whatever, New York, I want to raise money.
Host: Paul Barnhurst (15:04):
We'll go New York. We can pick on New York. I never like New Yorkers.
Guest: Taimour Zaman (15:07):
Right. Okay. Well, I'm just using the example. AI is not, from my perspective of the world, from my limited view of the world, it's not giving you what you want it to do when it comes to financial models, strategies and ideas like that. I think it's phenomenal for writing copy. Hey, I want to write a copy for my website or can you give me some ideas for wordings or something like that? I use AI. Hey, sometimes I just want somebody to vet my ideas, but it's not something I would use as a strategy to go get financing.
Host: Paul Barnhurst (15:45):
When the model goes to the board, it's your name that is on it. The advanced financial modeler is how you prove the work holds up. I took the exam, it sharpened my modeling skills and taught me how to be a better financial modeler. I invite you to join me and start the journey to becoming an AFM today. Go to fminstitute.com/podcast. That is fminstitute.com/podcast and use code podcast for 15% off. That makes sense. So I think that's really helpful. It feels like it's the AI, yes, it's been trained on everything. It can look really, really smart, but there's a detail and there's a level of understanding and there's other things that you have to go into it. That's why I think for most people it's human-led AI assisted. Unfortunately, it sounds like you're seeing a lot of models that are just AI built. There's not the human element.
Guest: Taimour Zaman (16:54):
Yes, 100%.
Host: Paul Barnhurst (16:55):
So let's move more to general reviews. Let's step away from AI. You've reviewed a lot of models. You've been doing this for 12 years, I think you said, a 14, whatever it's been. What have you learned that you wish every financial modeler understood when you're reviewing those? What are those lessons that you're like, "I wish modelers understood it this way."
Guest: Taimour Zaman (17:14):
I want to answer you in this way. Money is a form of energy, in my opinion, and money likes security and safety. And if you want to build a model around project financing, a simple way to think about it is how do you make it safe and secure? And you'll be surprised how many people go into derivatives or complicated models without thinking about the safety and security. So if I was going to use a financial model for financing, I would be thinking from a bank's perspective, investor's perspective, private equities perspective. And if you see your project, but from their perspective, you write a very different model. And one of the things you would do, to answer your question, what would I wish people do differently? So I don't know about you, Paul, but I live on this planet called planet Earth, and planet Earth has surprises.
(18:14):
If you told me 10 years ago COVID would hit and the world would shut down, I would think you might be a little bit cuckoo. If you told me that Trump would attack Iran and gas prices would go up, I'll say you're definitely cuckoo like that. But my point is that planet Earth has a lot of surprises. So when you create financial models in my sector specifically, oh, I'm going to go sell my business and you are going to get your money back and I'm going to become really rich. Well, planet Earth has a lot of surprises. So how you would think differently, and this is something I wish people would think about differently, is how can you put your feet in the shoe of the investor, the bank, and how can you give them multiple exit points so that if your plan doesn't work and planet earth does what planet earth does, as a financier, the banker, the investor, I don't get stuck with, ah boy, that was a bad investment.
(19:16):
That was a bad one that we did like that.
Host: Paul Barnhurst (19:17):
Sounds like, so one of the first things is you feel like a lot of times there's not the realistic exit strategy, there's not the thought of how do I make sure they feel comfortable with this investment? And so with that, when you say comfortable, you mentioned money like security, like reduced risk. Is it usually having run multiple scenarios, exit points? Is it reasonable assumptions? What are some of those things that the modeler needs to think about that increases that safety? Because obviously every project has risk and you're trying to create a realistic model. So what are those things?
Guest: Taimour Zaman (19:57):
100%. So every project has risk, so I don't have a particular answer because every project is so unique, but you have to think about how does the investor, the lender, get their money back? How do they get their return back? But if your idea does not work, what are some additional plan strategies and ideas you can incorporate so that you can go and say, "Okay, by the way, if plan A doesn't work out, plan B and plan C," that I think would be very interesting to look at. And I want to give you a question a model can look at from my field, from my perspective of it. And that would be if the relationship between you and me, Paul, doesn't work. We are all humans, right? If the relationship at some point in my project with you does not work, the relationship doesn't work, can the project that I'm bringing to you service your debt and your interest rate without my relationship working with you?
(21:04):
If you can think from that perspective, I promise you the financials will look very differently rather than I have an idea and you have to trust me.
Host: Paul Barnhurst (21:14):
So basically trying to show how you've thought about even if there's some challenges, even if some things go wrong, how are we going to protect the interest of whoever you're asking the funding for?
Guest: Taimour Zaman (21:27):
Exactly.
Host: Paul Barnhurst (21:27):
Because this is not like a VC play where I invest in a hundred things and if one of them hits a grand slam, the other 90 can go wherever they go and I'm okay.
Guest: Taimour Zaman (21:39):
Yes, exactly.
Host: Paul Barnhurst (21:41):
This is one where you're not looking to take big risk, you're looking to take smaller risks for a bigger return than a bank's going to give you, but not the home run portfolio strategy.
Guest: Taimour Zaman (21:54):
You got it. But I think that's a good question. What happens if something sours in our relationship? Can this project sustain you as a so-called lender? If I can demonstrate that, I promise you the model will look very differently rather than, "Hey, I have an idea and this is how big this market is growing. And if you invest so much money, so much..." It just is a very different model that will be put in front of them.
Host: Paul Barnhurst (22:20):
Got it. So when you're evaluating model, model reaches your desk, where do you go first? Are you looking at cash, you're looking at the P&L, assumptions? What's the first thing you usually look at?
Guest: Taimour Zaman (22:32):
I'm looking for, I'll give you the simplified version of the answer if I may. Something I think most people would understand. I would look for security of the capital. I'm looking for secure of rate of return and then secure of the exit plan. So what are the model is, whether it be financing and building or military equipment or some corporation buying out another corporation, how is the capital secure? How's the rate of return secure? And how is the exit plan secure? And a lot of people don't think that way.
Host: Paul Barnhurst (23:07):
Elaborate on that when you mean they don't think that way. Is it because they're just all thinking about how big they can make the business, how much they can grow it, what the opportunity is? And so -
Guest: Taimour Zaman (23:20):
Yeah. So if you come to me, Paul, as an example, I'm just going to pick you as an example, so please forgive me. So you probably come in saying, "Hey, I have a podcast and if you give me $10 million, I can get so much more eyeballs and attention and this is how much I can owe." That's awesome. That's your perspective and how you are looking at your business and you're going to build me a model based by your feelings and opinions and your perspective. Nothing better wrong with that perspective, but it's your perspective. It doesn't cover my money. What happens if your idea doesn't work? What happens if the recession? What happens if the disruptive technology that comes in the podcast business or the detention business, because my perspective would be very different to your perspective. So that's why if you can put yourself in the shoe of the financier, how you tell the story would be very different and therefore how you build your model would be very different.
Host: Paul Barnhurst (24:17):
There is a difference between editing a template and building a model from scratch. The advanced financial modeler tests whether you can actually build a model from scratch. What are you waiting for? Get started on your AFM journey today. Go to fminstitute.com/podcast. That is fminstitute.com/podcast and use code podcast for 15% off. All right, so I understand that. Totally get you build a very different model when you look at it from certain perspectives. What are other things? So beyond looking at that perspective, is there something in the way the model's built that causes it to lose credibility, like layout, format, all those type of things? What are some of the things that you look at and say beyond looking at the money side of it, but just visually if you look at a model and go, "All right, they clearly don't know what they're doing."
Guest: Taimour Zaman (25:22):
Yeah, that's a great question you asked me. When you don't think about the risks, you don't talk to me about the risks and then you're not exposing me to the risk because I'm a big boy and I know that every project has some kind of a risk and the naive model will say, "Oh, you have no risk," or will give me a dumb ass answer when it comes to a risk management conversation that would be speechless.
Host: Paul Barnhurst (25:48):
So do you get that from time to time where people think there's no risk in these transactions?
Guest: Taimour Zaman (25:53):
All the time. Not time to time, all the time. Oh, there's no risk. I was in London last week working with somebody who I know this gentleman for years and he's trying to buy a shell company in New York Stock Exchange that has cash and he wants to leverage that cash to buy two banks in Europe that are in this rest. And he's trying to tell me how this whole financial model will work. It's like a complicated conversation. When I ask him, "So what's the risk? Oh, no risk?"
Host: Paul Barnhurst (26:27):
Interesting. When you open a model and what's the sign that you know, "Hey, this person knows what they're doing?" As far as not necessarily I'm going to invest in this, but this is a well-built model, they know how to model, what are some signs?
Guest: Taimour Zaman (26:46):
That's a great question again too, and I really appreciate your questions. They have deep technical expertise. They know their self extremely well and they're able to think about stuff that I didn't think about myself related to their model and their project, and they're able to show it from different perspectives. And that's when I appreciate the model developer because I go, "Wow, this is a well thought through model for sure."
Host: Paul Barnhurst (27:17):
Okay. So take me through, let's just say we're taking a sample transaction, maybe something where the model appeared really sound, but it kind of just fails. It's like, "Yeah, there's no way we're going to finance this." Is it more that it's a bad idea? Even though the model sound, is it more around they didn't think about your risk? So walk through that journey.
Guest: Taimour Zaman (27:41):
Yeah, for sure. Without breaking any confidential information from client, so let's assume -
Host: Paul Barnhurst (27:46):
Oh, come on. Go ahead and break it. Tell me the worst story. They won't listen.
Guest: Taimour Zaman (27:51):
So I'm going to tell you some real stories, if I may. So we have a company in Turkey and a company in Egypt, and both of these companies are the largest players in their industry. So if there's a manufacturer, it's the largest manufacturer in Egypt and the largest manufacturer in Turkey, as an example. And both of them came to us for financing. One was over $30 million, the other one was over $120 million, and they came to us for financing and they're asking us, "Okay, look, we're a very established organisation. We are the best in this and we're the largest in this, and here's the financial model for us." Awesome. And that's a great perspective and a great story to tell. Most people say, "Wow, this is awesome." But if you're as experienced as I am, you would know that Egypt and Turkey in today's role is under the region of Middle East because of the Trump and Iran war is a risk itself.
Host: Paul Barnhurst (28:52):
Sure. There's just geopolitical risk.
Guest: Taimour Zaman (28:54):
Geopolitical risk. The next thing you need to know is that Turkey's currency and Egypt's currency is devaluing. So there's a massive currency risk that you wouldn't see in a model. And the guy wouldn't even think about the currency risk that he's facing me because I'm giving him a loan line of credit, whatever it is, using US dollars, but his currency is devaluating. And given that his business is as big or small as it is, how on earth can he finance and pay a hundred million dollar debt or $30 million debt when the value of his currency is devaluating? Can this business sustain itself? And those are two, not one, but two real examples, role case studies or projects we've seen this year, just this year alone. And the companies, if I give you the name of those companies, you go, wow, these are name brands.
(29:50):
These are household brands, not some no name guy. And we couldn't proceed with all those different risks in the project. Couldn't go into moving forward in a financing perspective.
Host: Paul Barnhurst (30:03):
And so as we talk about all these kind of different examples and funding things, if you were to list the one or two key takeaways for the financial modeler, what would it be?
Guest: Taimour Zaman (30:17):
Put yourself in my shoe, put yourself in the lender banker's shoe. New and understand the world is full of shocks and surprises and build me a model that protects and manages my risk. Those are the biggest two top big ones that I would tell you 80% of the market doesn't think about in. Or if they think about it, they're thinking about it from their perspective and not my perspective.
Host: Paul Barnhurst (30:41):
So when it comes to managing risk, obviously scenarios, but do you like seeing Monte Carlo simulations, sensitivities? What level of stuff do you get excited going, "Hey, they've really done a lot of their homework around risk." Because we all know risk is a range. There's no such thing as a single number.
Guest: Taimour Zaman (31:00):
100%. Unfortunately, given that we do best book financing, I don't have a cookie cutter answer. So if all I did was multi-residential homes in Miami, I would be able to give you an answer that's so precise to what you're looking for. But given I'm doing stuff around the world and I do structure financing in various industries, I don't have a specific cookie cutter answer to give, so I apologise for that one. But in a nutshell, I would tell you any experienced operator knows their business far better than I know their business. I mean, they put a model in front of me, I can very clearly see boy, they know their industry really well. From a storytelling perspective, from a risk perspective, from a vision perspective, as long as they cover the three questions I've told you about, how's my capital protected? How's my return protected?
(31:54):
How's my exit plan protected? What happens if my relationship with you guys sour? Can this model as it sustain it, sustain the financial agreement we have? Those would be the big ones that a lot of people don't even know that that should be what they should be thinking from or building models from.
Host: Paul Barnhurst (32:14):
Okay, so that's really helpful. Next question I want to ask is what do you think the role of AI should be in building financial models? Obviously AI is not going anywhere. People are going to use it. It's good at a number of things. How do you think about it? Where do you think they should be used?
Guest: Taimour Zaman (32:30):
I think AI would be a very good person to do a role play for you to say if I was a financier, if I was the private equity firm, how can I critique your model? That would be a good one. How can I give you feedback that you think about how can I give you additional perspectives and data that you can think about and becomes an engine that's there to assist a human being in parallel to human being. So it's AI assisted model building rather than AI building the entire model. It's crystal clear when AI builds the whole model versus know the client has the experienced software and they know what to do. They didn't hire a student of a college at 20 bucks an hour or whatever to build an AI model because the guy's too lazy to understand what he wants to do.
(33:22):
In the masterclass I told you about, we got 16 people. They're all buying 16 different types of businesses, hopefully in their niche. A lot of people don't necessarily always buy something in their niche. They're trying to buy a supplier or some adjacent industry to their business where they don't necessarily know that industry. And they use these AI models or hire students or whoever they hire to use AI models. And it's like, I'm teaching you how to buy a business and using your own cash. Guess what? You need to know a lot about that business before you can even present a model to anybody.
Host: Paul Barnhurst (34:03):
FP&A guy here. One of the certifications I'm most proud of is the Advanced Financial modeler or the AFM from FMI Institute. Why am I so proud of it? Because it taught me how to be a better modeler. I didn't just take a test. I had to demonstrate that I could build a fully integrated three-statement model, a skill that is invaluable for financial modelers. It's one of the certifications I'm most proud of, and I encourage you to earn it as well. So go ahead and join me. Get started on your journey to becoming an AFM charter holder. Go to fminstitute.com/podcast and use code podcast for 15% off. Got it. I'm going to switch gears here. This is a question I often ask people. So completely different range. Obviously you use Excel some, a lot of reviewing things. What's your favourite shortcut in Excel?
Guest: Taimour Zaman (35:05):
I don't use Excel. I'm so sorry to tell you. I do, sorry. I look at Excel, but I don't use -
Host: Paul Barnhurst (35:10):
You don't use it enough to have a favourite shortcut? That's kind of what I figured, but I had to see because I usually ask a lot of people. What's your favourite thing about Excel?
Guest: Taimour Zaman (35:18):
I do a lot of interest calculations. So it's be like if I'm giving you a loan at 5.85%, let's say for three years, what are the interest payments per year? So to kind of copy and paste the formulas and be able to take it from one road, from one sheet to another sheet to another sheet is probably one of the things that I enjoy the most on Excel. And I have to tell you, I don't use AI that much for it. I should be maybe, but I vividly remember trying to do what I do on Excel on AI when ChatGPT was first introduced over a year ago. I was like, yeah, that's wrong. That's wrong. That's wrong, that's wrong. I was like, I'm ageing myself, I think.
Host: Paul Barnhurst (36:00):
Yeah. No, early on, definitely a lot of areas. Now some of the building it can do, at least it's using Excel formulas and you got a much better chance of it being right than when the LM itself does the math. So totally understand that. Rapid fire incoming, 20 questions, yes or no answers, no hedging aloud. Circular references, VBA, the future of Excel and more. Let's find out what our guest really thinks. First one, will Excel ever die? No. What financial statement is most important for modelers? P&L, balance sheet, or cash flow?
Guest: Taimour Zaman (36:39):
All three.
Host: Paul Barnhurst (36:39):
If you had to pick one.
Guest: Taimour Zaman (36:40):
Balance sheet.
Host: Paul Barnhurst (36:41):
All right. Do you have a favourite model you like to use like Claude or ChatGPT or any of those? You have one you find you use the most? Gronk?
Guest: Taimour Zaman (36:48):
ChatGPT.
Host: Paul Barnhurst (36:50):
Okay. This will be an interesting one. If you could only have one in all your models, would you rather have a sensitivity analysis or a scenario analysis?
Guest: Taimour Zaman (37:00):
Scenario analysis.
Host: Paul Barnhurst (37:01):
I figured that's what you were going to say. Do you believe financial models are the number one corporate decision making tool?
Guest: Taimour Zaman (37:10):
No.
Host: Paul Barnhurst (37:11):
What is?
Guest: Taimour Zaman (37:11):
Vision and storytelling. Hats down beats modeling all. All
Host: Paul Barnhurst (37:15):
Right. So that's the ones I think I'm going to ask you for rapid fire. I'll spare you the ones about circular references and some of the more technical stuff since I know you're not a big time model. As we wrap up here, just got a little bit more to go. If you could leave parting advice to the modeler, what's the last thing you tell
Guest: Taimour Zaman (37:34):
Them? Think from the shoes of the person you're presenting it from, not from your shoe. If it is in the area of money or finance, which is the era I'm in, think about securing my capital, secure rate of return, and securing my exit plan. Have a very unique vision, bold vision. Be able to tell me a story that compliments you more.
Host: Paul Barnhurst (37:55):
All right. Love it. If people want to get in touch with you or learn more about your business or yourself, what's the best way for them to do that?
Guest: Taimour Zaman (38:03):
Our website is https://altfundsglobal.com/, A-L-T-F-U-N-D-S, global.com. We're based in Canada or Switzerland. Both countries are very cold that winter. If you are a skier, I highly, high recommend Switzerland for Christmas time. I don't think even New York. Respectfully, I don't think New York will be as pretty as Geneva or Zurich during Christmastime if you love skiing, especially if you love skiing. And if you love a lot of ethnic foods that are world-class, I highly recommend Canada, specifically Toronto.
Host: Paul Barnhurst (38:35):
All right, perfect. So do your modeling elsewhere. Do your Christmas time skiing in Geneva, get your flavour of food in Toronto, and raise your capital wherever.
Guest: Taimour Zaman (38:47):
There you go. You got it. Perfect.
Host: Paul Barnhurst (38:49):
Well, thank you for carving out some time with me, Tamara, kind of giving your perspective of what you're looking for and how you think about things. I enjoyed talking with you for a few minutes.
Guest: Taimour Zaman (39:00):
Hey, Pop, before you end the show, I just want to compliment you. I love your integrity to your pureness and having fun. Just want to say that all the shows and all your different podcasts, although it's not spoken, it's very loud in the background, and that's something I very much appreciate about your show and your podcast and who you are as a human being. So thank you for that.
Host: Paul Barnhurst (39:21):
Well, thank you. I appreciate it. And I just want to thank you for carving out some time today. So thanks for coming on the show.
Guest: Taimour Zaman (39:27):
You're welcome. Thank you.
Host: Paul Barnhurst (39:28):
Thanks. Financial Modeler's Corner was brought to you by the Financial Modeling Institute. This year I completed the Advanced Financial Modeler Certification and it made me a better financial modeler. What are you waiting for? Visit FMI at www.fminstitute.com/podcast and use code podcast to save 15% when you enrol in one of the accreditations today.