Persistence pays, as Guy Hands, the ex-Nomura banker-turned-buyout king, shows. His new outfit Terra Firma Capital Partners has just closed its first deal: the purchase of 42,000 apartments in the Ger-man city of Cologne.
The 1.9 billion deal comes just a month after the first clos-ing of his funds. Hands raised 1 billionwell shy of his hoped-for 3 billion but satisfactory in the circumstances, according to rivals in the European buyout market.
Hands made his name at Nomuras Lon-don office, where he ran an outfit that pio-neered the use of securitization to refinance parcels of unloved assets such as bars and armed forces housing. The 3.8 billion that he invested made an internal rate of return of around 60%, according to Hands, and made him a multi-millionaire.
The new deal is very much in the house style: Hands has long targeted Germany as a land of opportunity for buyoutsini-tially with little effect. While at Nomura he eventually bought a 2.1 billion parcel of apartments for railway workers.
That deal underlined the potential pit-falls, as well as the opportunities, of tak-ing public assets private in continental Europe. The deal became mired in political infighting.
his time around Terra Firma bought the assets from a savings bank and from the center-left-controlled city government. Much of Europes housing is owned by the public sector, and bankers such as Hands have long sought ways of injecting private capital to develop a real estate market along American lines.