Chairman's letters and speeches


01 December 2009

2009 Annual Review Letter

Those who have read our previous annual reviews will know that Terra Firma has always believed that private equity adds value for all its stakeholders through the fundamental improvement of the operations of its investments. In the current environment this is truer than ever, and I therefore wanted to start my letter by providing you with some headlines on what we have achieved in our portfolio.

01 November 2009

2009 Q3 Investor Letter

Based on some of my letters and speeches predicting a smaller private equity industry, some people have concluded that I am negative on private equity. This is certainly not the case. The fact is that the industry needs to shrink because, on the whole, we raised too much capital too quickly.

01 August 2009

2009 Q2 Investor Letter

We are now in the longest and deepest recession of the post war era. It is, therefore, entirely understandable that investors are continually on the lookout for any sign of recovery, the so-called ‘green shoots’. 

01 July 2009

Speech to Investor Dinner - July 2009, Beijing

Private equity can thrive only if it returns to its roots, realigns itself with its investors, and focuses on how to improve the strategic and operational performance of businesses through long-term investment. The recession is not at an end yet; any green-shoots are the result of unprecedented stimulus spending.  There are going to be some extraordinary deal opportunities as over-leveraged governments sell assets.

01 May 2009

2009 Q1 Investor Letter

While the debate continues as to the state of the general economic environment around the world and as to what and who caused the market turmoil, I believe it is imperative that the private equity industry returns to focussing on our businesses of investing and managing capital.

01 February 2009

2008 Q4 Investor Letter

We all know that 2008 was probably the most challenging investment year of our professional lives. The dramatic global decline in stock market values has destroyed more than five years of growth in the value of listed investments.

01 January 2009

Guy Hands' speech at SuperReturn 2009, Paris - “Is the private equity LBO model broken due to falling returns and lack of leverage?"

With $7 trillion of financing up for refinancing in the next few years, the private equity industry is more likely to be in the eye of the storm rather than through it. The contraction will be good for the industry’s long-term health as it will work on fewer deals but focus on driving real operational and strategic value in businesses.  This was hard to achieve in the bubble years, and the effects of leverage disguised when it was missing.

01 January 2009

Wilton Park Speech, 2009

The origins of alternative investments were lost as huge capital inflows made them mainstream.  Too often alternative investments were perfectly normal investments but with greater leverage and less liquidity.  Alignment was replaced by an asset gathering mentality. In future, as the worldwide recession, political realignment and banking crisis create dislocation and opportunity, investors should look for two things: alignment of interest and how the manager adds value.