(Reuters) – Terra Firma, the private equity firm controlled by Guy Hands, is handing back some 80 million euros ($101.2 million) of performance fees after the firm wrote down the value of its assets by 1.37 billion euros.
“If our investors suffer, then it is only right that the Terra Firma team’s reward should suffer at the same time,” said Hands in a statement.
A source close to the company confirmed that Terra Firma’s [TERA.UL] team had agreed to forego some 80 million euros of performance fees, with Hands personally agreeing to give back 40 million of fess generated since 2004.
The move came as Terra Firma cut the value of its investments by 1.37 billion euros, echoing recent steep writedowns by fellow private equity firms Blackstone, KKR and Candover on investments made at the height of the LBO boom.
The source confirmed that music business EMI accounted for the vast majority of the firm’s writedown, with the remainder stemming from the revaluation of a small stake in an unnamed public company.
The provision against EMI — the record label of artists including Coldplay and Cliff Richard — sees Terra Firma write off about 50 percent its 2007, 2.6 billion euro investment. (editing by David Cowell)