Terra Firma Capital Partners has capped a busy few weeks with the final closing of the firm’s third fund,
No placement agent was identified for the fundraising but
Fund III is a marked step forward in ambition from TFCP II, the firm’s debut fund as a standalone entity after spinning out from Japanese bank Nomura in 2002. Fund II raised €2bn just three years ago, a record-breaking amount for a European fund manager, in March 2004.
However, an indication of how much the economic environment has changed in that time is that the vehicle was believed have been €1bn less than had initially been targeted owing to very different market sentiment.
As with the previous fund, Terra Firma’s partners and founder Guy Hands have put approximately €200m of their own money into TFCP III. Hands is believed to have invested £20m of his own money in Fund II, which also saw a commitment from Nomura to provide 10% of the capital as part of the spin-out agreement.
Hands said the fundraising received “strong demand” from existing and new limited partners and many investors in Fund II have reallocated to the latest vehicle, including Adams Street Partners, Canada Pension Plan, Partners Group, Horsley Bridges, Citi and TIAA-CREF.
Other investors in Fund III include AlpInvest Partners, Allianz Private Equity Partners, Standard Life, CDPQ, Gartmore Private Equity OMERS and State of Oregon.
Terra Firma did not comment on the fundraising, but recent reports suggest provisions may have been made for up to 40% of the new fund to be allocated to the £4bn take-private of EMI, with the firm providing up to £1.47bn of equity.