Letters from Guy Hands the CEO of Terra Firma
May 2008
2008 Q1 Letter
... These times are not going to be easy for any private equity practitioner. But while the Terra Firma portfolio may be purely long, I believe it will weather the current conditions to deliver long-term value. However, we will have to work harder than ever and focus even more on our strategy and our businesses to create and maintain that value.
February 2008
2007 Q4 Letter
There seems to be a daily sea of articles and analysis about the causes of the current “credit crunch” ... In my view, the banks are only dealing with a fraction of their true potential credit losses. The full scale of the problem will only become visible over the next 2-4 years, and, I believe, will be 4-5 times the size of the losses that the banks have taken to date ... In my view, it is the incentive structures, both in the political and banking arenas, that are the major causes of today’s problems, and indeed it is here that one should look in order to prevent similar problems occurring again.
November 2007
2007 Q3 Letter
As we are all well aware, the environment that private equity faces has changed dramatically in the last few months. Some weeks ago, I attended a conference for senior LPs and GPs and what I found amazing was how incredibly positive the GPs were on the prospects for private equity over the next few years ... While I don’t want to be a doom-sayer, I felt I should share with you some of the issues facing the world markets that I shared with the conference attendees and which are keeping me up at night, in contrast to the sound sleep of my other GP colleagues.
August 2007
2007 Q2 Letter
As Europe closes down for its annual summer holiday after what has been a very turbulent time in the market, it is appropriate to reflect on the four key objectives Terra Firma set itself for 2007, especially as this turbulence is likely to remain with us for some time. The objectives...
May 2007
2007 Q1 Letter
Private equity is now firmly in the big leagues. In 2006 alone, it: • made up 25% of the world’s M&A activity; • was the sponsor to 50% of IPOs; • issued 40% of all high yield debt; • accounted for 50% of leveraged loans; and • raised over $400 billion.
February 2007
2006 Q4 Letter
As a youngster, I was fascinated by those who excelled in their field and each Christmas received a Guinness Book of Records. However, it was never a wholly satisfying read. The records, facts and statistics were good for holiday trivia, but I never learnt the answers to the really interesting questions – what drove these people to achieve their record and how did they achieve it?
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