Meet the private equity princeling gunning for the UK’s defence industry
- Shonnel Malani, 41, is a managing director at the London branch of American private equity behemoth Advent International
- He’s taken over Cobham and Laird, and now has his sights on Ultra Electronics
- In his personal life, he is a guitar player, a keen runner, and perhaps unexpectedly a Harry Potter buff
Power couple: Shonnel Malani and wife Malika
Pictured with his glamorous wife, this is the 41-year-old leading the buyout of vast tracts of Britain’s world-renowned defence industry.
Shonnel Malani is a managing director at the London branch of American private equity behemoth Advent International, where his work has included overseeing the takeovers of Laird and Cobham.
He may not be a household name, but he is a central player in one of the biggest debates about British business in recent times.
And his current task is to orchestrate Advent’s attempt to snap up Ultra Electronics for £2.6bn through Cobham, a company he chairs following last year’s controversial takeover.
Ultra’s work includes making cutting-edge submarine-hunting equipment for the Royal Navy. The FTSE 250-listed group’s board gave the green light to the deal earlier this week. But Advent’s move has been seen as audacious by many in the City. And it raised alarm bells the moment it was announced among industry experts worried the sale will compromise national security and accelerate the hollowing out of Britain’s defence industry.
Malani has resolutely stayed out of the public spotlight since he began spearheading Advent’s advance on some of the country’s top industrial groups. In his professional life, the married father-of-two has spent his career in finance and raced quickly up the corporate ladder.
In his personal life, he is a guitar player, a keen runner, and perhaps unexpectedly a Harry Potter buff. He lives with his family in a £5m mansion in Surrey. Malani, who is a British citizen, was born in India and attended Bishops Cotton Boys’ School in Bangalore.
He graduated from Canada’s prestigious McGill University with a finance degree in 2002, before beginning his career as an investment banker at Morgan Stanley. He then moved to private equity titan Bain Capital before studying for an MBA at the University of Pennsylvania’s Wharton School between 2007 and 2009, where the alumni include Elon Musk, Warren Buffett and Donald Trump.
MALANI also has an MPA – Masters in Public Administration – from the University of Pennsylvania’s Fels Institute of Government. His time at the Ivy League college overlapped with that of his future wife, Malika, who was also studying for an MBA.
Luxury living: Malani owns a £5million mansion in Surrey
She went on to a career in finance that included stints at Lehman Brothers, JPMorgan, Brookfield Asset Management and Fremont Realty Capital. After Wharton, Shonnel Malani joined Centerbridge Partners and within two years had moved to Advent, where he has put in more than a decade’s service.
He has since been instrumental in the £1.2bn takeover of antenna-maker Laird, where he now sits on the board. Malani is also a director of Rubix, which was formed after Advent bought Brammer, a Cheshire-based distributor of industrial repair kits, for £222m.
But perhaps the biggest test of his dealmaking skills came during the £4bn battle for Cobham – a takeover that pitted him against politicians, the founding Cobham family and the military establishment. Advent had promised to be a ‘long-term investor’ in the Dorset-based company, which was founded by Sir Alan Cobham in 1934 and pioneered air-to-air refuelling technology.
Cobham had been struggling for several years under poor management and an attempt to move into industries outside defence that went disastrously wrong. But under chief executive David Lockwood it had been turning itself around, meaning its share price would almost certainly have gained ground in future. Even Cobham’s bosses admitted the deal was at a low price.
Music buff: Malani is a keen guitar player
But Cobham’s takeover was slammed by opponents including the founding Cobham family, former Tory minister Lord Heseltine, the ex-head of the navy Admiral Lord West, as well as MPs and former bosses. At the time of the takeover, Malani had said a series of undertakings agreed with then-Business Secretary Andrea Leadsom had provided ‘important long-term assurances’ for customers and staff on jobs and future investments.
But within 18 months it had been restructured, chopped up, and prize businesses had been sold. Advent did not break any of the guarantees – but critics now say that the very fact that Cobham was dismantled so extensively show that the assurances were weak and that any future ones will likely also be worthless.
Malani et al have set the Ultra offer at a tempting £35, or 63pc higher than before any announcements were made. This is a huge premium by City standards. But now the precedent set by Advent – and by extension Malani himself – over the initial Cobham deal threatens to derail his third major takeover in four years.
Military figures and politicians – including Defence Committee chairman Tobias Ellwood and Lord West – are urging the Government to intervene. But should Malani succeed in seizing control of Ultra, he will cement his position as a major player in Britain’s vital defence industry, albeit with little public scrutiny such is the secretive nature of his private equity world.