Terra Firma to stage a comeback with €1bn war chest for new investments

New strategy is a break with the traditional model of raising pools of money 'blind' before choosing buyout targets

Guy Hands made his name at Goldman Sachs and Nomura, where his team worked on $20bn (£13bn) of acquisitions

Guy Hands, the private equity mogul, has stepped up his comeback from Terra Firma’s disastrous takeover of EMI in 2007 by unveiling a €1bn (£742m) war chest for new deals.

Mr Hands, who relocated to the Channel Islands in 2009 for tax reasons, said Terra Firma would start using its own money for takeovers alongside funds from outside investors. The €1bn was raised by exiting businesses such as the windpower company Infinis, listed in London, and the property group Deutsche Annington, which was floated in Germany.

“We are coming off the most successful period in our history in terms of money returned to our investors and profits made for them,” he said. “With transactions like Deutsche Annington, we have returned more than €6bn to our investors over the past three years and produced cash profits for them in excess of €4bn.

“Based on the capital returned and the profits made, we are delighted to announce that we have committed discretionary capital available for new transactions.”

Mr Hands, one of Britain’s best known deal makers, made his name at Goldman Sachs and Nomura, where his team worked on $20bn (£13bn) of acquisitions.

However, it is for the £4.2bn debt-laden takeover of EMI, the music company behind a who’s who of international artists from The Beatles to Katy Perry, that he is now best known. EMI was seized by Citigroup in 2011 after running into financial difficulties. Mr Hands lost a fraud case against the US bank in New York in 2010 and the dispute is now set for the UK courts in 2016.

Terra Firma counts Odeon cinemas and the Garden Centre Group among its current investments and last raised a private equity fund in 2007, before the EMI deal. A separate $2bn fund aimed at buying renewable energy assets has not yet raised enough money, a year and half after its launch.

The latest change in strategy is a break with the traditional model used by private equity firms of raising pools of money “blind” before choosing buyout targets.

Mr Hands added: “With this capital, Terra Firma will be able to invest across a broader spectrum of opportunities, and allow us to be more entrepreneurial and opportunistic about the way in which we invest.

“We are very much looking forward to finding new deals to deploy this capital,” he said. “We will still focus on asset-backed businesses that require change, as we always have, but by being creative and imaginative we hope to find a wider range of potential opportunities.”