Hands nets £1.2bn for buyout fund

CITY financier Guy Hands today attempted to silence critics by raising e1.7bn (£1.2bn) for a new buyout fund, one of the largest in Europe, in a move that provides further evidence of improving conditions in the venture capital industry.

Hands, who built a reputation for backing multi-billion-pound deals while at Japanese bank Nomura, has been slow off the mark at his new private equity firm, Terra Firma, fuelling suggestions that he had lost his Midas touch.

However, the firm today said it had rounded off an 18-month marketing drive for a new buyout fund just short of its previously lowered e2bn target. Hands now has the war chest to launch major deals, typically involving companies that want to go private or have assets for sale.

Terra Firma had hoped to raise about e3bn from institutional investors but had to scale back because of fierce competition from rivals as well as poor confidence during the bear markets. The firm hopes to launch two more funds of similar size by January.

The recent rise in equity and bond markets means there is a greater appetite for such funds. At least four other companies are trying to raise a total of more than e10bn for buyout funds.