Guy Hands, a European private-equity pioneer, says his confidence is shaken more than 10 years after a very public deal collapse. And although the businessman feels that he may never recapture his mojo, he believes his past stumbles have been a boon.
Hands, who years ago struck a more prominent figure within the private-equity community, blew £1.75 billion in 2007 by investing in U.K. music company EMI Group, which counted Coldplay among its acts.
“I’m not sure I’ll ever get my confidence back to where it was in 2007,” Hands tells MarketWatch, in a candid interview.
Since 2002, the 59-year-old British financier has invested almost £15 billion in 33 businesses via Terra Firma but has suffered a string of recent setbacks and admits opportunities have dried up since EMI.
‘I’m not sure I’ll ever get my confidence back to where it was in 2007.’
However, despite his wounded confidence, Hands is still angling at a comeback — drawing some inspiration from Tiger Woods who won the 2019 Masters last month, capping an improbable career renaissance after a lengthy fallow period.
“This is a slightly strange statement,” he says. “But Tiger Woods was completely written off and he’s gone back and he’s proved it extraordinarily.”
The journey forward won’t be a chip shot for the Terra Firma titan. EMI resulted in lasting damage to the financier’s reputation. The music publisher had run into financial trouble and Citigroup, who provided the loan for Terra Firma’s buyout, took possession of the business in 2011. Ultimately, century-old EMI was sold in separate pieces to Universal Music Group and Sony Corp.
But the setbacks for Hands didn’t end after the EMI collapse.
Last year, Terra Firma — a spinoff of Nomura International’s investment arm in 2002 — was forced to cancel its attempt at raising some €3 billion for a fresh investment fund, and more recently Chief Executive Andrew Géczy quit the firm amid reports of clashes with Hands.
Hands says EMI “frankly, closed down a lot of avenues” and “opportunities haven’t been as forthcoming.”
His woes weren’t helped by the high-profile lawsuit he brought against Citi — which he would eventually drop. He characterized the protracted legal dispute as a distraction.
“Fighting was more natural to me than giving in and crying,” he said. “I probably should have made that decision [to drop the legal action] a long time earlier but you have a duty to your investors to do the best for them.”
‘I think I’m a kinder person, I think I’m a more empathetic person and a more realistic person.’
The investor has struggled to move beyond the EMI debacle, but has recently assumed a more upbeat, contemplative posture as he considers the lessons learned.
“I think I’m a better person” he says. “I think I’m a kinder person, I think I’m a more empathetic person and a more realistic person,” he said.
“I think I realized just how much one’s lucky to have a certain skill but it’s nothing more than a skill you are lucky to have. There is an awful pressure in society today to have the cult of the celebrity.”
There is a reason Hands holds Woods up as an example of a person who has overcome great odds. He empathizes with aspects of the life of the famed golfer, who has contended with his own public embarrassments but has refused to shrink from the challenge of returning to glory.
Like Woods, Hands feels that he has a lot to prove to his family, friends, and detractors.
“You could argue there is a certain similarity,” he says. “To some extent, just like Tiger Woods, there is a bit of me that wants to prove to my kids that having fought for the last 10 years, there is a reason to have done that, because financially it has been incredibly expensive and emotionally it’s been incredibly expensive.” Hands and his wife, Julia, have four children.
Beyond the psychological cost, the past several years have taken a physical toll. Hands suffers from Type 2 diabetes and has been fastidious about staying healthy, lately.
He has managed to lose 35 pounds after changing his eating habits, monitoring his intake, and receiving help for an unusual obsession: potatoes.
“I love potatoes and I found potatoes spiked my sugars more than any other thing out there,” he says, admitting that he could down “10 roast potatoes quite easily.”
“A little bit of hypnosis helped,” he said.
Hypnosis, however, hasn’t always helped to vanquish his regrets.
Terra Firma would be worth £20 billion today, he laments, if EMI hadn’t soured. Hands lost about €200 million of his personal wealth in deal, according to reports.
So, what provides him solace, besides his compulsion for potatoes? “I’ve still got enough money to buy decent wine, eat good meals and I don’t do a lot else.”
“It’s not a disaster. It’s only a disaster if I want to make it a disaster,” he said.
That is, perhaps, a perspective Terra Firma investors, who also took it on the chin with Hands as EMI flamed out, should also adhere to.
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