39: Private Equity and Leveraged Buyouts: A Discussion with Guy Hands, CEO of Terra Firma

Money Maze Podcast

Business, Investing, Management, News, Business News

4.8 • 216 Ratings

🗓️ 24 June 2021

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode, Guy Hands describes being sent to a special needs school because of profound dyslexia, how he dealt with the challenge, won a place at Oxford and from there, young and indebted, joined Goldman Sachs. He describes the emergence of the eurobond market, how he was soon running their asset structuring business, and why Nomura persuaded him to use their capital to develop their LBO journey.

He describes buying pubs and railway rolling stock, the $6 billion generated for the firm, and the establishment of Terra Firma. He talks about the business model, the early successes, and types of transactions they looked for, before discussing the merits and demerits of PE investing, for both investors and the economy.

He talks about the risks should interest rates normalize, where the problems might surface, and the very particular failure of his investment in EMI. He analyses lessons learned from that episode, how it has influenced his thinking on deals, and how Terra Firma assesses each transaction today. He discloses some of the asset allocation thinking of his family office and the importance of a large “real asset” component.

Guy talks about his charitable endeavours; where and why he gives. He speaks candidly about the lessons and scars from the EMI episode, and how he should have asked for professional help, both mentally and physically. He describes suffering a stroke and re-emerging with a strong sense of the need to do good and not just make money.

Finally, he offers some clear advice for today’s youth in terms of careers, qualities he looks for in candidates and a surprising book choice!

Transcript

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0:00.0	The Welcome to the Money Maze podcast. I'm Simon Brewer and Will Campion and I have created this show to explore and unravel some of the mysteries surrounding the investment business.
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1:19.5	that Schroeder's has become a sponsor and corporate partner of the Money Maize podcast. Shroder's is a
1:25.9	global investment and wealth manager, with a purpose to provide
1:29.4	excellent investment performance to clients through active investment management. By serving
1:35.5	institutions and individuals worldwide, Schroeder serves wider society. Channeling capital
1:41.7	into sustainable and durable businesses accelerates positive change in the world. Funding
1:47.4	the future is a privilege. Schroeder use it wisely and responsibly. As we know, capital is at risk
1:54.2	with investing. Bramont is also a sponsor of the MoneyMays podcast. Bramont is an award-winning British company that produces
2:02.2	beautifully engineered chronometers designed to appeal to those who share the passion and
2:07.3	appreciation of the innovation and mastery behind a beautiful mechanical wristwatch.
2:12.7	Bromont. Bromont. If you're born profoundly dyslexic, but survivor by the luxury British watchmaker, Vermont.
2:22.2	If you're born profoundly dyslexic, but survive at school,
2:26.6	win a place at Oxford, and from there accelerate through the world of finance,
2:29.6	from Eurobonds, leverage buyouts and private equity,
	...

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