Private equity is poised to make a comeback, at least according to Terra Firma's leading light Guy Hands.
Following a decade of debt-fuelled extravagance which saw even relatively healthy companies bought off the stock market, loaded up with debt and sold back to institutional investors, Mr Hands said the industry had entered "the wilderness years". But speaking at the SuperInvestor conference, an annual industry pow-wow in Paris, Mr Hands predicted private equity was poised for a breakout.
Despite the fact that the shockwaves from the latest private equity disaster – the collapse of care provider Southern Cross – have barely abated, together with his own less than happy experience as a wannabe music mogul at EMI, Mr Hands was unapologetic.
He hailed private-equity firms as long-term investors, saying: "Part of what gives private equity an edge is that we do not have to manage our portfolio companies to the drum-beat of quarterly earnings and can manage for the long term."
Critics of the industry have tended to comment on the plight of workers squeezed by private equity or the rewards enjoyed by its barons. But the Terra Firma boss insisted many of the criticisms were, "simply not representative of the industry – they are largely polemic and help to raise passions and sell newspapers".