BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Financial

Terra Firma seeks €1bn from sovereign fund

Posted on February 29, 2012

Guy Hands

Terra Firma Capital Partners has dropped plans to start fundraising this spring. The private equity group, run by British financier Guy Hands, is seeking instead to collect about €1bn from a single sovereign wealth fund to keep doing deals.

The group, which made headlines with its failed investment in music group EMI, is delaying the start of its next fundraising effort for at least another few months, people familiar with its plans said.

They added that Mr Hands wants to wait for further recovery of Terra Firma’s third fund portfolio before asking investors to commit fresh capital.

The fund, a €5.4bn vehicle that was raised at the height of the buy-out boom five years ago and suffered £1.75bn in losses from the EMI deal, increased its value by 16 per cent last year.

But it is still far from breaking even, being worth 40 per cent of initial cost last year. The group is targeting an increase in value to 60 per cent this year and wants to bring the fund back to par by 2015.

The move to delay the fundraising of up to €3bn, due to begin this spring, underlined how some private equity groups have been forced to scale down.

It emerged in February that UK mid-market group Duke Street had dropped attempts to raise an £850m fund amid a lacklustre performance of its previous fund. Only a few weeks later, larger UK buy-out firm BC Partners announced it had successfully collected €6.5bn in fresh capital.

Several large investors have warned that Terra Firma might struggle with a protracted multiyear fundraising effort. “The longer they wait, the better,” one industry executive said.

Terra Firma declined to comment. When asked at a conference in Berlin about the group’s ability to raise a fund, the 52-year-old founder said: “I am 100 per cent confident.”

The buy-out group’s third fund, which includes investments such as CPC, an Australian beef producer, and Awas, one of the largest global aircraft leasing companies, has about €500m left for new deals.