Breaking News

Tweet TWEET

Terra Firma’s Hands Says Europe Needs Labor-Market Reform

Guy Hands, chairman and founder of private-equity firm Terra Firma Capital Partners Ltd., said economic growth in Europe will remain sluggish and volatility may persist for as long as two decades unless it undergoes a labor-market overhaul.

The continent should make changes to labor and market practices similar to those made under former German Chancellor Gerhard Schroeder, Hands said today at a conference in Boston. Schroeder a decade ago unveiled a flexible labor-market and welfare plan that economists credit with reinvigorating the German economy.

Hands said private-equity firms can find opportunities in Europe despite the slow economic growth by investing in “zombie companies that have banks breathing down their necks” and businesses that could benefit from a strategic or management overhaul. Many European banks are also gradually starting to sell distressed assets, Hands said.

London-based Terra Firma, started by Hands in 1994 as Nomura International’s Principal Finance Group, has invested more than 16 billion euros ($21 billion) in 33 businesses since then, according to the firm’s website.

To contact the reporter on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.