Terra Firma Seeks up to $1.33B from Sovereign Fund

Terra Firma Capital Partners is seeking to raise up to 1 billion euros ($1.33 billion) from a sovereign wealth fund so it can continue to do deals when its buy-out fund’s investment period expires next year, Reuters reported, citing the Financial Times. The buy-out group has up to 700 million euros available for new investment in its third fund.

(Reuters) – Terra Firma Capital Partners is seeking to raise up to 1 billion euros ($1.33 billion) from a sovereign wealth fund so it can continue to do deals when its buy-out fund’s investment period expires next year, the Financial Times reported on Friday.

Big investors from China and the Middle East have approached Guy Hands’ private equity firm, saying they wanted it to create a separate pool worth between 500 million euros and 1 billion euros, the FT reported, citing people close to the matter.

Hands, who founded Terra Firma and is also its chairman, is mulling the idea as a way of bridging the gap between the current 5.4 billion euro fund and the completion of its next fundraising, which the firm plans to begin in early spring, the newspaper reported.

The buy-out group has up to 700 million euros available for new investment in its third fund and Hands is confident about splashing this cash before the end of May, when the investment period will have expired, the FT reported, citing several people.

Potential investments in Italy and Spain figure among the deals he is working on, the newspaper said.

Terra Firma lost a long battle to keep hold of debt-ridden EMI, the London-based record label that managed acts ranging from the Beatles to Coldplay, earlier this year.

The seizure of EMI by Citigroup wiped out Terra Firma’s 1.7 billion pound equity investment in the music group and ended almost four years of troubled ownership for the private equity firm.

The FT cited several large investors as saying that Terra Firma might struggle with a protracted multiyear fundraising on the heels of its EMI deal.

Terra Firma was unavailable for immediate comment.