Macquarie Capital’s Mazari Sees Waste Industry as Investment Opportunity

In the waste and recycling industry, publicly-traded companies report their earnings quarterly. These earnings are then dissected by many people in the industry and compared to previous years and quarters to view how the industry is doing and to predict what’s to come in the future.

One of those people who is actively involved in the earnings reviewing process is Hamzah Mazari, the managing director at Macquarie Capital, a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions.

“Hamzah has a complete understanding of the waste and recycling business,” says Will Flower, vice president of Winters Bros. Waste Systems. “More importantly, he has excellent vision into the future of the business. From the changing waste stream to advancements in technology, he understands the impact and the opportunities that exist in the solid waste and recycling sector. Regardless of the age of the industry, one consistent aspect of our industry has been finance. Hamzah’s knowledge of finances associated with the waste sector will help the industry continue to evolve.”

Based in New York City, Mazari has achieved a strong reputation within both the investment and waste industries. In 2018, he was named as a Waste360 40 Under 40 award recipient. In this interview, Mazari speaks with Waste360 about his career and why he says the waste industry is a smart investment.

Waste360: What are some of your major responsibilities?

Hamzah Mazari: My responsibilities range from advising institutional investors, mutual funds and hedge funds about how to invest in the waste management space, specifically public companies.

Also, my job is to help introduce some newer waste companies that need capital raising or don’t know institutional investors and connect them with institutional investors that could provide growth capital to their business in order to grow.

Waste360: Is your portfolio strictly waste management?

Hamzah Mazari: No, it’s not. My portfolio, broadly speaking, is business services, which includes environmental services, which includes the solid waste industry. [Business services] is a broad sector.

Waste360:  What brought you to the waste industry sector?

Hamzah Mazari: When I was working at another investment bank—Credit Suisse in 2005—most of my experience was with covering basic materials companies—paper and forest products—and companies along those lines. It just so happened that the previous analyst who was looking at the waste management space decided to take another job. Credit Suisse approached me about switching roles and covering the waste space. I looked at it and said, this is a stable business; it’s not going anywhere. It tends to be underfollowed. It falls under the radar. At the same time, we had the view that there was going to be a lot of consolidation in this space. There was a lot action going on in the space at that time.

When I got into it, we just viewed it as a stable business with pricing power in a sector that is going to be here to stay, with a view that there could be a lot of action in the investment world, in the banking world and the soft market world with some of these potential consolidations and deals going on. It looked attractive. I had never heard of it previously, so I kind of just fell into it because there was an opening at my job.

Waste360: How do you do some of your research into companies?

Hamzah Mazari: The way that we do our research is that we have a financial model on every single public company. It’s a proprietary model that we build ourselves. We have that as a baseline to sort of forecast earnings. We are very close with our management teams. We visit CEOs, CFOs and management of all of our public companies once a month. We also do channel checks with private companies. As you know, private companies are probably 16 percent to 17 percent of the entire sector, so we have private contacts as well.  

At the same time, we also monitor single-family housing starts and other macro indicators, and we couple a bottoms-up research with top-down on what we’re hearing in terms of the U.S. consumer spend data, housing trends and our views of inflation longer term.

Then, just being in very close touch with public companies and private companies on a monthly basis in order to feed our model, in terms of various assumptions, and to make sure that they are in the right ballpark.

Waste360: Where did you go to college?

Hamzah Mazari: I went to Stanford University.

Waste360: After college, how did you get into the financial industry?

Hamzah Mazari: I did my CPA at PricewaterhouseCoopers and KPMG. I was in the public accounting world right after college and basically used public accounting to get into the investment banking world at Credit Suisse.

For two years, I worked with Nuverra Environmental Solutions, which is an oil and gas waste management company. That was a good experience on the corporate side, and then I decided to come back to the investment world. I joined Macquarie Capital about two years ago.

Waste360: I could see how this could be an underutilized sector. It’s not sexy. It’s not tech. In some ways, however, it is tech.

Hamzah Mazari: That’s exactly right. It’s not the sexiest space, but it is here to stay. That is kind of the opportunity. There are a lot of investors who haven’t looked at this space that we think are going to begin to look at this space.

We think there are going to be more investors looking at waste over the next five to 10 years.

Also, to your point, we think that the impact of technology in the waste space is in early innings. We think about autonomous machinery at the landfill that hasn’t been used yet. We see autonomous trucks and autonomous equipment in the mining sector. We haven’t seen it at the landfill yet, so there is a lot of technology opportunity, too—not just routing software and maybe more software in the call centers, but also just from an equipment perspective, at the landfill, at least. Who knows, the technology could evolve. That is very much in the early innings, and I think the technology could add a little bit more sexiness to the space. I don’t think you need it, but it will be on more people’s radars.