Big shot of the week
GUY HANDS, 58 FOUNDER, TERRA FIRMA
Confronted with the not inconsiderable figure of Guy Hands, one does not immediately feel in the presence of a financial titan. A dishevelled six-footer with an unkempt bouffant and tombstone teeth, shirt buttons straining at the navel, he looks the sort of fellow who’d struggle to count the correct change at the check-out desk.
But with a personal fortune put at £256m, we must assume there is more going on upstairs than his shambolic appearance would suggest. Hands is chairman and founder of terra firma, the private equity vehicle which specialises in leveraged buyouts of underperforming businesses.
to those he’s made rich, he’s a financial visionary with a talent for spotting value where others see only decay. to his detractors – and there are plenty of those – he is a ruthless deal maker, a cold-blooded numbers man with little care for the companies he takes over or the people it employs.
Successful investments include odeon cinemas, threshers wine shops and William Hill bookmakers. But there have been stinkers, too. In 2003 he was forced to write off an investment in Le Meridien hotel chain to the tune of £1.9bn.
HeALSo stumped up money for a movie project involving a publican who discovers a giant shrimp washed up on a beach which he trains to be a heavyweight boxer. disappointingly, it never made it to the multiplexes.
Most famous of all was his £3.2bn purchase of music label eMI, described as the worst private equity deal of all time which left Hands personally £200m poorer.
He looks likely to take another bath on care homes four Seasons, which was this week teetering on the brink of collapse, putting 17,000 elderly residents at risk.
Born in London to South African parents, Hands was written off early in life as a no-hoper. As a child, he underwent speech therapy. He was useless at sport. terrible at reading and writing. the only self-esteem he got at school was from maths and playing chess.
Somehow he scraped into oxford, where he set up an arts supply business. He lived for a while with William Hague, the future tory leader who was later best man at Hands’s wedding to childhood sweetheart Julia, with whom he has four grown-up children.
Saddled with £40,000 of debts upon graduation, Hands’s careers adviser suggested that he declare bankruptcy. Instead, Hands asked what the highest paid graduate job was that would help pay off the debt. the job was at Goldman Sachs, which paid £13,000 plus bonuses. decent corn for a graduate in 1982.
Within four years he’d risen to head of bond trading in London before joining Japanese bank nomura, where he made a killing buying pubs. newly minted, he set up terra firma in 2002.
When it snapped up eMI in 2008, the label had 14,000 artists on its books, barely a third of which had ever made a record.
tales of corporate excess abound. there were reports of a £200,000-a-year slush fund for ‘fruit and flowers’ ( trade speak for illicit substances), a £5m house in Mayfair for executive use and, most bizarrely, a £20,000 bill for candles. Hands set about extracting the rotten teeth.
the backlash from the artistic community was considerable.
Miserablist rockers radiohead departed, as did the rolling Stones. robbie Williams’s manager, whose client had been the beneficiary of a ludicrous £80m recording contract, queenily compared Hands to a plantation owner. When the credit crunch hit, eMI fell into the hands of Citibank after failing to meet the terms of its loans.
these days, Hands runs terra firma from tax-friendly Guernsey. Julia pops over at weekends, but otherwise remains at their timbered mansion in Sevenoaks.
described as a workaholic, Hands frequently works 15-hour days, though friends say he enjoys nothing more than putting on black tie or performing on his karaoke machine. He has a taste for life’s pleasures, keeping an excellent cellar and adores fine dining.
So jollier than his vulture-like reputation would suggest. that said, when Guy Hands swoops on a company, the pungent whiff of controversy usually follows.