The classic family business model is simple: a single business is founded by a patriarch who holds on to it as tightly as possible. He will pass it on to one of his children who will remake the core business in their own image, but it will essentially remain the same. The pattern is repeated ad infinitum.
Australia’s Tulla Group is not like that at all. It was founded in the early 1990s by Kevin Maloney, who left school aged 14 and started work at ANZ bank. He left after 19 years for Elders Resources Finance Limited, which lent money to resource projects all over the world.
In his mid-40s Kevin left the corporate world to become an entrepreneur and ran businesses in sectors as varied as taxis, concrete, jewellery, shoes and copper mining in Bolivia. Some failed, but many were successful, and the exits kept on getting bigger.
Tulla, which is named after the Irish town where the family originally came from, hit the big time in 2010 when it sold MAC Services Group, a company founded in 1996 which provided accommodation for the mining industry – so-called “working man resorts” – for AUS$651 million, making the Maloneys one of Australia’s wealthiest families.
Instead of sitting back and enjoying their wealth, the family has continued to expand its interests, and it now has investments in four areas: mining and resources, racehorse breeding, property and other VC investments. Among the assets are the 1,700-acre Segenhoe stud, a firm that makes GPS systems and a copper mine. Diversification was never so diverse.
It is also expanding geographically – the copper asset is in New Mexico – and 36-year-old second-gen Andrew, who is director of the Tulla Group, has now moved to London, via an MBA at the IE business school in Spain.
Why the move? “The world is a big place and Australia is kind of remote, and for both the family and myself I thought it would be a good opportunity to develop, to spread our wings a bit further,” Andrew says. “London is a good base, it works quite well with Australia because a lot of people come through there regularly, and I look after the American asset from there.”
Andrew has been working for Tulla since his early 20s and began his career while still at university in Mac Services in the development section. “It was about acquiring land, getting the necessary approvals, getting the financing requirements, and then developing them and handing them over to our operations team.”
Although it was hard work, he knows that he was lucky to get into Mac on the ground floor. “I was certainly given opportunities that you might not get anywhere else,” he says. “That’s not typical of all family businesses, some demand you have certain qualifications or experience before you move up the ranks, but at the time I joined it was a small to medium sized business, not a large family conglomerate.”
Over his decade at Mac his job changed as the business evolved, especially when the firm listed in 2007. “I moved up into running the investment committee looking at all the investment propositions that came up and reviewing them, running them through a formal process,” he says.
All four of the second-gen have worked for Tulla at some point, and Andrew’s sister Suzanne is currently actively involved in the racehorse breeding operation. He is keen to keep up the family’s tradition of looking for new opportunities.
Another appeal of London, he says, is that it is a good location from which to scout for new investments. “A lot of work has gone into the group corporate strategy, because we have been through quite a change where we went from having essentially one major business to diversifying ourselves,” Andrew says. “Three completely new businesses have been developed in four years, and there have been lots of VC/private equity-type investments that have happened in that time too.”
So the family has thought hard about its future. “We are looking at getting back into one of our core industries, which is hospitality-type assets,” Andrew says. “We have a lot of competencies in developing and operating them, and we are maybe looking at assets outside of mining.” He won’t give away any more, only saying that the plan is “in the early stages”.
Beyond that, he can’t say what direction the group will go in. The eldest of the third generation is just 10, and the founder is still only 68. The stunning success they have had so far only suggests that whatever the Maloneys choose to do, they’ll make a go of it. Just don’t expect them to do anything too conventional.