This is a book by Guy Hands, the well-known financier and investor. Hands is the founder and chairman of Terra Firma, the private equity firm, which he founded in 2002 as a spinout from Numura. It was once one of the largest Private Equity firms in Europe.
The start of the book really draws you in and covers a story involving a Russian cell with blood on the walls and a man sitting in front of Hands with a gun attempting to intimidate Hands into completing a deal. Luckily none of the deals I’ve been involved in have ended like that!!
I have to say it is a very frank and honest account of the life of Guy Hands and all the deals he has been involved with and the resulting highs and very much the lows of investing in this market. He has clearly been overall very successful in his career and made a lot of money, but the book actually covers a lot more of the lows and the deals that caused the most issues. If you didn’t know how successful he had been and just read about the individual deals covered in the book then you might come away thinking it was a tale of starting at the top and finishing somewhere near the bottom, so it is an interesting way to approach the book. I find most other entrepreneurs/business people focus more on the highs in their books.
The Deals
Many of the deals, including all the famous ones, are covered in detail and you find out a lot more than was previously publicly known. These include:
Cinema Chains – Acquisitions of Odeon and UCI
Residential Property – Owning over 50,000 homes via the Annington Homes deal
Pub Portfolios – Buying portfolios totalling more than 5,000 pubs
Train Leasing – Angel Trains involving more than 3,000 engines and carriages
EMI – the acquisition of the music, recording and publishing company, EMI, the most turbulent deal of all, and the one that almost bankrupted Hands. The deal lost Terra Firma more than £1.75bn and Hands around £150m personally. This story could be a book on its own and the book covers the deal and the backlash from the artists as Hands attempted to add some business disciplines into the business. In the end the bank who lent much of the money for the deal took back the investment, but Hands sued the bank for misrepresenting the deal as they were working on behalf of Terra Firma as the buyer but also for the seller. Hands felt he was led to believe there were other bidders and needed to up his bid, when it turned out he was the only buyer in play. However, Hands lost both court cases.
I would say that after the initial Russian story, the book cover the early life of Hands and I found this a little more hard going if I’m honest. However, it is worth persevering as the book really gets into its own when it starts to the cover the deals that Hands and Terra Firma are most known for.
Overall, I found this is a really good book once I got past the early life part. This may be a daft comment given how successful Hands has been, but because the book is such an open one and covers so many of the low points, I came away wondering how good he actually was at picking the winners. I’d be interested to know if you feel the same having read the book.