Terra Firma's Hands to Raise Smaller Funds, Seek Fewer Investors

  • Guy Hands to seek deals in industries facing little disruption
  • Buyout firm chairman concerned about future of European Union

Buyout firm Terra Firma Capital Partners plans to raise smaller funds and seek just two to three deals a year amid more challenging market conditions, according to its chairman and founder Guy Hands.

Terra Firma will also try to decrease the number of investors in its funds to enable closer conversations about potential investments, Hands said, speaking with Bloomberg’s Guy Johnson at Bloomberg Markets Most Influential Summit in London today.

“To some extent it is going back to where it was 20 to 30 years ago,” Hands said. “I believe we can find two or three deals a year that are really worth doing.”

Since its inception in 1994, Terra Firma has invested more than 16 billion euros ($18 billion) in 33 businesses with an aggregate enterprise value of more than 48 billion euros, according to its website. Terra Firma will seek deals in industries that face little disruption in the long term, but need some change now, according to Hands.

“If you’re changing the whole model the upside is vast,” Hands said. “If you’re changing that specific one, it’s smaller but easier to predict.”

Hands also shared his concerns about the future of the European Union, saying that increasing political disconnect across the continent could have major repercussions. “Europe is facing up to the biggest crisis since the Second World War,” he said. “I’m not sure in 15 years’ time that the EU as we know it will exist, and I’m pretty sure if it doesn’t exist we’ll have wars in Europe. That really scares me,” he added.

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