Investor Guy Hands is reportedly pumping £20 million of his own money into his private equity firm Terra Firma, which recently acquired Four Seasons Health Care.
According to sources quoted in the Financial Times
, the firm’s income from annual management fees paid by current investors is set to fall by two-thirds - while it will also struggle to raise a new fund.
Terra Firma’s ability to raise capital remains compromised by the disastrous buyout of music group EMI in 2007, which saw investors lose £1.75 billion, and Hands lose £200 million personally.
said Hands has set aside half of Terra Firma’s £40 million annual salary bill in a bid to retain his best dealmakers as income falls.
At the end of April, Terra Firma announced the acquisition of Four Seasons
for a total consideration of up to £825 million.