Terra Firma Said to Win Approval For Fund II ExtensionKiel Porter and Kristen Schweizer
Terra Firma Capital Partners Ltd., the private-equity firm run by Guy Hands, won consent from investors to extend the life of its second fund, according to two people with knowledge of the talks.
The Guernsey, Channel Islands-based firm is extending Terra Firma Capital Partners II’s planned wind-down to April 2016 from April 2014 to avoid rushing sales of the remaining companies in the 2.1 billion euro ($2.8 billion) fund, said the people, who asked not be identified because the talks are private.
In exchange for the extension, which was agreed to last month, Terra Firma won’t charge investors including insurance firms and pension funds its 1.5 percent management fee, the people said, though it will retain its planned share of the profit.
The remaining investments in the fund, which was started in 2004, include U.K.-based Odeon Cinemas Group Ltd., Infinis Plc, an energy company, and Autobahn Tank & Rast Gmbh, a German highway-services company, according to Terra Firma’s website.
Officials at Terra Firma declined to comment. The buyout firm sold one of the other companies in the portfolio, Northern Irish gas distribution company Phoenix Energy Holdings Group, to Hastings Funds Management Ltd. last week. The sale meant Terra Firma has now returned all the capital invested in the fund, one of the people said.
Private-equity firms typically structure funds to last a decade, with an investment period of five years and the firm receiving 20 percent of the profits from investments above an agreed threshold.