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Allegiance Capital's David Mahmood: Stories from a busy life
Jeff Bounds
Senior Staff Writer
Dallas Business Journal
David Mahmood has so many stories, it’s tough to
know where to start. There’s the one where he
was running boilers and other steam-power
engineering systems in his teens, after he lied
about his age to get the job. There’s the Omar
Sharif thing. And did we mention buying and
selling a cruise ship? Mahmood, who turns 75 on
May 23, had most of those experiences before
starting Allegiance Capital Corp., the Dallas
investment bank he chairs, 15 years ago.
Allegiance has around 50 employees across five
offices in Texas, New York, Illinois and
Minnesota. Allegiance finds buyers and investors
for private companies with revenue between $20
million and $500 million. Staff writer Jeff Bounds
recently asked Mahmood to share some of his
tales. What follows is just a glimpse of that
conversation.
Tell us about your family: My wife, Connie
Chavez Mahmood, is secretary and treasurer (at
Allegiance). She handles the administrative side.
She has her office on one side of the building; I
have mine on the other. My daughter was born on
Christmas Day. We call her Angel. She went to
New York and became a confirmed New Yorker.
A little over a year ago, she got married. (The
couple) decided that Dallas would be a better
place to start a family. I not only got a corporate
counsel (Jason Rivera), I got a son-in-law.
And your family growing up? My father’s name
was Ferris Mahmood. He was Syrian and Irish.
Ferris means “the rock.” It was an appropriate
description of my father. He was a very solid
person who could handle almost anything without
getting flustered or upset. My mother’s name
was Cecilia Hahn. She was Dutch and Bohemian.
Bohemia became part of Czechoslovakia. All four
grandparents came from different countries,
bringing with them religious and political beliefs.
At family get-togethers it was important to know
what you were talking about because there were
a lot of smart people who could articulate their
David Mahmood – Founder/CEO Allegiance Capital Corporation
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position well. At age 16, Angel came home from
school at Greenhill and asked me what she was.
Since I am one-fourth Syrian, Irish, Dutch and
Bohemian and her mother’s parents came from
Mexico, I told Angel that with the type of heritage
she has, there was almost no religion or holiday
she couldn’t celebrate. She was a true melting pot
American.
What was your childhood like? When I got out
of sixth grade, (my father) put me to work. My
father owned restaurants and nightclubs. I had all
sorts of jobs, from making salads and seeing that
the jukeboxes and pinball machines were
maintained to making sure the money was taken
out. I had my first car when I was 13. I went to
school, and I worked all the way through high
school.
Where did you go to college? I studied pre-law
at the University of St. Thomas in Minnesota. I
never got a law degree. I was making a lot more
money than the professors and lawyers in town.
How? I found I had a mechanical ability. I lied
about my age at 17 and made myself 23, went to
night school that summer and studied steam-
power engineering. I worked in large power plants
that produced high-pressure steam for
manufacturing processes, generating electricity
for heating buildings and water. I worked for a
variety of companies in the Twin Cities area, so
that when I went to college I would work nights
and weekends. The truth of the matter was, I was
making a lot of money very fast.
Aren’t boilers dangerous? It’s like flying an
airplane. It’s all calm and serene, with a few
moments of terror where you think you’re going to
blow something up.
How did you get into the business of making
playing cards? I worked for Brown & Bigelow,
which was a specialty advertising company with
118 printing presses. I started in the industrial
engineering department. By the time I was 30, I
was managing 1,200 people in the sales and
marketing department. (At one point), they had a
division that was bleeding at the ears. It made
Hoyle playing cards. They told me, “We’re going
to make you the general manager of that division.”
That sounded important, (but) it meant get rid of
the inventory, lay off everybody and shut the
business down. I came up with the fact that the
name Hoyle wasn’t trademarked. I hired Omar
Sharif, who was a bridge nut, and the Italian Blue
Team (of professional bridge players). It
generated millions of dollars of free advertising.
If you were selling playing cards to las vegas
casinos and hanging out with Omar Sharif, do
you have any stories to tell? I could write a
small book.
How many businesses have you run?
I’ve started eight companies from scratch.
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Such as? When I was 33, I started Hobby Time.
It was a hobby and craft business, selling weaving
looms and wine and root beer-making kits. Kids
could make root beer with 5 percent or 6 percent
alcohol. It’s amazing what you can do with a little
yeast and sugar. I ran it for three years and sold
it.
Didn’t you own a cruise ship once? In the year
2000, I bought a cruise ship in Australia for $10.5
million and sold it to Hong Kong Chinese for $15.5
million. I only saw a picture of the ship. I had
back-to-back closings, and if the transaction had
failed, I would have lost $50,000. In that closing, I
made $5 million and negotiated the entire deal
from Dallas.
Do you have any hobbies? I’m a voracious
reader. I don’t read fiction. I used to, but I find life
is strange enough. And I like to travel. I like
seeing different places. I don’t like going to the
same place, because it’s like reading yesterday’s
newspaper.
So why not read and travel instead of
work? Maybe I don’t know any better. As long as
you’re still learning and having fun, there’s no
reason to stop. I’m still learning and having fun.
I’m finally getting to the point where people say,
“No kidding, you’re that old?”
Since you get bored easily, might you
eventually find investment banking dull?
I’m still excited. I’m a deal junkie. I’m dealing with
a lot of different companies and a lot of different
transactions. I have an opportunity to get into a
wide variety of different businesses. I’ve worked in
Mexico and Canada. I find it challenging,
interesting and fun.
Any parting advice for young people? Water is
the next oil. That’s where the future is. Water will
become a valuable resource.
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