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Terra Firma chief leaves after Hands bust-up

The chief executive of Terra Firma Capital Partners, the buyout firm best known for its ill-fated ownership of the EMI record label, has stepped down after falling out with its billionaire founder.

Sky News has learnt that Andrew Geczy, who joined the private equity group in 2016, left on Thursday, according to a memo circulated to Terra Firma’s investors.

‎Guy Hands, the firm’s founder and figurehead, told its backers that “effective immediately, Andrew Geczy is no longer working at Terra Firma”.

“While I‎ cannot give you further details on his departure at this time, the senior leadership team and I are working to ensure that the day-to-day running of the firm continues without interruption and that we move forward with our business objectives,” the note, which has been seen by Sky News, said.

Sources said that Mr Hands and Mr Geczy had been “at loggerheads” for some time, with disputes ranging across a spectrum of issues relating to Terra Firma’s management.

The details of any severance agreement between the two parties were unclear on Friday, and Mr Geczy could not be reached for comment.

Guernsey-based Mr Hands is one of the most colourful and prominent figures in British finance, having made his fortune devising leveraged buyouts at Nomura, the Japanese bank.

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He is regarded as ‎a maverick character with a knack for identifying investment opportunities overlooked by others in the buyout space.

However, Mr Hands has seen his reputation hurt by a number of soured deals and his failure to raise a new private equity fund even as others in the industry have found attracting capital pools of many billions of pounds.

The sudden exit of Terra Firma’s chief executive is unlikely to help Mr Hands.

A veteran of the financial services industry, Mr Geczy’s previous jobs include having been chief executive of wholesale banking and markets at Lloyds Banking Group and 14 years at Citigroup.

More recently, he was chief executive of international and institutional banking at Australia and New Zealand Banking Group.

Mr Geczy was appointed less than three years ago to help restore Terra Firma’s credibility after a bruising period resulting from the loss of its EMI investment and a series of subsequent legal battles featuring Mr Hands.

Under Mr Geczy’s stewardship, Terra Firma has generated strong returns from investments including through the €1.3bn disposal of RTR, a solar energy platform.

It has also restructured the finances of Annington, a vast landlord to the Ministry of Defence, which is widely expected to be sold in the next couple of years.

However, the firm has also been battling to salvage value from parts of the portfolio of Four Seasons Health Care, Britain’s biggest private nursing home operator.

The business is now largely under the control of its main creditor, and is close to launching a formal auction.

Other companies in Terra Firma’s portfolio include CPC, an Australian beef producer, and German hotel group Welcome Hotels.

Terra Firma is currently running a piecemeal sale process at Wyevale Garden Centres, which has seen many of its sites offloaded to rivals.

Mr Geczy’s departure is the latest by a string of top-level executives who have either left or scaled back their roles at Mr Hands’ firm.

In December, Justin King, the former boss of J Sainsbury, relinquished his responsibilities for the day-to-day management of Terra Firma.

Mr King retained his vice-chairman title, and his boardroom seats at Terra Firma-backed companies including Wyevale and Annington.

The appointments of both Mr King and Mr Geczy represented attempts by Mr Hands to repair relations with investors following Terra Firma’s calamitous ownership of EMI.

Despite success in terms of profit growth, the financial crisis and strained relations with Citigroup, EMI’s biggest lender, meant that Terra Firma was unable to refinance its debt.

The Wall Street bank eventually seized control of EMI, sparking a bitter legal battle lasting more than five years which tarnished Mr Hands’s reputation.

Terra Firma has recently focused on raising money for individual deals, although it has also been exploring other structures for using investors’ money to finance acquisitions.

The firm’s most recent general fund, TFCP III, was closed in May 2007, raising €5.4bn.

Terra Firma could not be reached for comment on Friday.

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