They made a fortune when they sold their stake in a billion dollar company, but then they didn’t know what to do
They made a fortune when they sold their stake in a multi-billion dollar company, but then this family didn’t know what to do.
Mark Maloney and his family may be worth more than a half-billion dollars but long ago the Sydney entrepreneur learnt from his father the value of humility, especially in a family business.
It is almost 10 years since the Maloneys reaped $340m from the sale of their stake in listed mining services firm MAC Services Group to US oilfield services company Oil States International. It was one of the biggest deals of the past two decades in corporate Australia.
“We can all look back and see it as a positive, but it was also a major disruption to the family,” says Maloney. “No one knew how to manage it, what to expect. We were left with a pot of money with no defined strategy.”
In a wide-ranging interview with his father, Kevin Maloney, the duo talk together for the first time about the inner workings of one of the nation’s least-known rich-lister family businesses.
“It took us time to work out what we wanted to do, how we would operate as a family in that new domain,” Mark Maloney says.
He has spoken previously of the depression and a near nervous breakdown he suffered after that huge sale. He spent four years away from the family business, running his private investment company, Intrepic Group, before returning to the family’s Tulla Group, named after the Maloneys’ Irish home town.
All four Maloney siblings have an economic interest in Tulla, which focuses on small to middle market-listed companies, private equity, venture capital and debt. Its food home delivery, agriculture and gold businesses are benefiting from the coronavirus pandemic, but the family is keen to put purpose before profit.
Says Mark Maloney: “There will be opportunities on the other side but I think we need to make sure none of us acts like vultures taking advantage of something that is so unfortunate and caught a lot of people off guard. I think working collaboratively with partners to get them back on track after this passes will be the way to go. It will ultimately make us closer as a community and stronger on the other side. It’s an opportunity to grow as humans … hopefully.”
Kevin Maloney, the chairman of Tulla, left school at 14, worked at ANZ for almost two decades and tried his hand at an eclectic range of businesses before striking it rich with MAC. Mark and his brother Andrew, who both carry the title of managing director, operate the Bondi Junction-based group on a day-to-day basis. Andrew, who is based in Madrid, spent time in London after securing an MBA at the IE business school in Spain. Mark, previously an investment banker at JPMorgan in London, is focused on the finance side of the business.
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‘You ... need to take into account everyone’s passions so everyone feels some alignment to the business’
— Mark Maloney
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Kevin’s two daughters, Rachel Campbell and Suzanne Grosvenor, are also involved in Tulla (Campbell runs the company’s marketing and communications, as she did for MAC before it was sold) and work with their mother, Leslie, on the family’s philanthropic interests.
Mark says every family business has its ups and downs, but a key to keeping the Maloneys together has been “not being too ego driven, which can sometimes be an easy trap to fall into, particularly when you have some large successes. You need to find a way to stay grounded or the world will do that for you pretty quickly.”
“Keep your own house in order first and don’t point the finger at others,’’ he says. “You also need to take into account everyone’s passions so everyone feels some alignment to the business. The ideal intersection for us is the crossover between everyone’s passions, everyone’s skill set and the business opportunities for Australian-based companies on the global stage.”
Tulla has three main divisions grouped under the broad banners of resources, finance and social. Mark Maloney engineered the social division taking a controlling stake in well-known healthy fast food group SumoSalad, whose home delivery business is growing strongly in the coronavirus pandemic. But it hasn’t been an easy investment and he credits his father with helping him stick with it.
“Sumo has been my baby and it has been a tough business and nearly came unstuck,” he says. “Kevin has been very calming and supportive to me on that. When I wanted to get rid of it at any price, he helped me to stop and think … Kevin has taken lots of financial knocks, particularly in the early days having come close to bankruptcy a couple of times. Every time he has taken full accountability and got right back up to get on with it. He has amazing resilience really and is not normally fazed by much.”
Kevin Maloney has a generous streak shown through the millions he has given to family, employees (with stock and options), sports and charities. “Kevin employs people from time to time that others deem too old or of not having a lot to offer the workplace,” Mark Maloney says. “Quite often these people turn out to have amazing experience and network contacts.”
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‘I try to teach my children to work on the business, not in the business’
— Kevin Maloney
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Kevin Maloney says he and his sons share similar skill sets, which means they complement each other: “We know what we are doing, I don’t need to give a lot of direction or control. We try not to cross over into each other’s sphere of what they are running. This whole organisation is run on ‘the good to great’ theory. You need the right people on the bus and the right people running the businesses.” (The theory is from the classic management book by American Jim Collins.)
“I try to teach my children to work on the business, not in the business,” Kevin Maloney says. “We try to make businesses work with their own identity. Our corporate head office is just there to give financing and secretarial support.”
He has based his career on the law of probabilities: Lots of things are going to fail so you need to have a few eggs in a few baskets and when you get a sniff that something is going to work, that is when you go big.
Mark Maloney says Tulla will expand its Segenhoe Group, one of Australia’s leading thoroughbred horse studs and racing operations, into so-called experiences.
“People are looking to connect more, to look after themselves better, to have experiences,” he says. “It is all about how we think the world is going to live going forward. Horseracing is about bringing people together, so the strategy is to take Segenhoe into other forms of experiences. We have a travel company which just provides corporate travel. But we think we could link it with Segenhoe, constructing experiences for people.”
Grosvenor works at Segenhoe and her father says she is “very interested in the horses business”. Before working for Tulla, she was a secondary school teacher specialising in health and physical education, religion and maths.
Mark Maloney admits family business isn’t easy. “But if you embrace it, it is an amazing way to grow,” he says. “Your parents and brothers and sisters are the best at pushing your buttons. But equally it is a great opportunity to work on those. Through the trials and tribulations of the past 10 years, we are now even closer than we were before. Family business is a tough business, but it is a great opportunity.”