Tuesday, 29 October 2013
The Nigerian-born Investment Banker Who Bought Gatwick Airport
Adebayo Ogunlesi is the chairman and managing partner of Global Infrastructure Partners (GIP), a New York-based independent private equity fund focused primarily on infrastructural investments, with over $5.6 billion under management. The purchase of Gatwick Airport may have grabbed all the headlines, but GIP has some other noteworthy assets in its portfolio including a 75% stake in London City Airport, and Biffa Limited, a UK based waste management company.
Gatwick suffered deep losses over the years, and all the turnaround efforts made by its former managers, the British Airport Authority (BAA), failed to halt the downward spiral. In the first nine months of 2009, the airport reportedly recorded a pre-tax loss of over £780 million, prompting the British government to actively shop for buyers. BAA also reportedly lost £225 million on Gatwick after it was compelled to sell the airport by the Competition Commission.
While Ogunlesi’s acquisition might have brought him international acclaim and made him something of an overnight private equity rock star, pundits kept their fingers crossed to see what he will make out of the ailing airport.
But Ogunlesi believed strongly in the future of the airport so much that he invested some of his own personal funds into the acquisition. He promised to make Gatwick a truly first class international airline and substantially improve the customer experience. Judging from his antecedents, he is likely to deliver on those promises.
In 2006, Ogunlesi had led the acquisition of London City Airport. Immediately after its acquisition, Ogunlesi spearheaded a series of operational improvements aimed at boosting capacity and improving the operating offering and service quality. According to information available on GIP’s corporate website, London City Airport’s passenger numbers grew by 22% in its first full year of ownership.
Ogunlesi has had the good fortune of being born into a solid pedigree. His father was the first Nigerian-born professor of medicine and tutored at the country’s premier university, University of Ibadan. After attending the prestigious King’s College, Lagos, he went ahead to study philosophy, politics and economics at Oxford where he graduated at the top of his class, and later earned law and business degrees from Harvard. At Harvard, he was an outstanding student, becoming one of the first two editors of African descent to serve together on the influential Harvard Law Review.
After studying at Harvard, he took up a job as a clerk for the late American Supreme Court justice, Thurgood Marshall, serving at the court for 3 years- from 1980 till 1983. This effectively made Ogunlesi the first non-American ever to clerk at the U.S’ highest court.
In 1983, Ogunlesi enjoyed a brief stint at the New York Law firm, Cravath, Swaine & Moore as an associate, before taking up an appointment with First Boston, an investment bank.
At First Boston, he swiftly rose from the position of associate to managing director of the bank’s project-finance group. He spent a great deal of his time travelling through emerging market countries where he brokered high-powered deals among lenders, governments, and firms involved in mining, oil refineries and natural gas plants.
In 1997, the Credit Suisse Group acquired First Boston and subsequently renamed it Credit Suisse First Boston (CSFB). Ogunlesi was still one of the institution’s most strategic managers, and by 2002, the new owners had appointed him as the managing director of the firm’s global investment banking division- one of the most influential subsidiaries of the group. Ogunlesi was in charge of a division that managed $2.8 billion in assets and employed over 1,200 investment bankers. His new appointment also earned him a seat on the bank’s board of directors and its influential 15-member operating committee.
However, the elevation was not without some challenges. Ogunlesi had to return the division back to profitability, considering that the previous year it had lost almost $1 billion. He adopted a lean, mean management style, firing 300 bankers and 50 senior executives within the first few weeks of his assumption. He persuaded the remaining staff to accept pay cuts and advocated for reduced operating expenses. Top bankers were required to relinquish the luxury of limousines in favour of taxis. But his cost-cutting measures worked magic. Within a year, the bank had returned to profitability and its revenue had risen by 25 percent.
An eye on Africa
Despite his long sojourn in Europe and America, Ogunlesi still manages to stay abreast of developments in Africa. He has helped champion the African economic renaissance and in 2009 was appointed non-executive chairman of the Africa Finance Corporation (AFC), a financial institution set up to revamp Africa’s critical infrastructure and invest in key sectors of the continent’s economy. AFC, which was patterned after the International Finance Corporation (IFC) – the private sector arm of the World Bank Group, was a lead investor in the $240 million Main One submarine fibre optic cable that will expand telecommunications capacity in West Africa. AFC also led Africa’s participation in the $750 million syndicated lending facility to develop the landmark Ghanaian Jubilee Oil Field, one of West Africa’s largest deepwater offshore developments in over a decade.
In Nigeria, Ogunlesi is spearheading the corporation’s attempt to address the country’s epileptic power supply. In January 2011 it hosted a power sector roundtable to examine the key issues, identify the constraints and proffer practical solutions to the challenges facing Independent Power Plants (IPPs) in the country. Ogunlesi’s passion for his home country has seen him advising successive governments on fiscal policies, strategic management and economic development. He served as an informal adviser to former president Olusegun Obasanjo, and still consults for the country’s current government on occasion.
Recently, it was announced that Ogunlesi’s Global Infrastructure Partners (GIP) was set to acquire Edinburgh airport for a surprise £807 million ($1.3 billion). Click here to read the full story on Ventures Africa.