Terra Firma Capital Partners has brought in former Citi banker Kamal Tabet to head its investor relations team ahead of the potential launch of a fund in the next 12 months.
The former head of Citigroup’s Financial Entrepreneurs Group will become head of the firm’s investor relations team, filling a vacancy left by Michael Hewett's departure at the start of the year, and will also join senior management as a managing director.
Terra Firma expects to begin raising its fourth fund next year, with a possible target range of €2 billion to €3 billion, according to Reuters. A spokesperson for the firm declined to comment about fundraising.
“[Tabet] knows the private equity world inside and out,” a source close to Terra Firma said. “He’s very connected to the LP world and he’s worked with a lot of the GPs.”
The appointment of a former senior Citi banker by a firm with such a fractious recent relationship with the bank may raise eyebrows.
Terra Firma relinquished control of its biggest investment to date, music publisher EMI, to its lender Citi last year. Since then it has been working to improve the performance its funds, particularly its third from which most of the investment in EMI was made.
Last year, the firm sued Citi, which lent billions of dollars for the EMI acquisition in 2007 and managed the sale process. Guy Hands, chairman of Terra Firma, claimed in the lawsuit a Citi banker tricked his firm into acquiring EMI for £4 billion, alleging it had inflated the purchase price by suggesting other bidders remained in the auction when they had already withdrawn.
The firm ultimately lost £1.58 billion in the investment, and lost the lawsuit in court as well. The trial was contentious, with two former friends, Hands and Citi banker David Wormsley, accusing each other of lying. Citi eventually seized control of EMI and has been reportedly preparing to sell the company.
In a recent interview with Private Equity International, Hands said Terra Firma would adjust its strategy to “hit singles” rather than swing for the fences with big injections on individual investments. A source said any future deals would likely be significantly smaller than the £4 billion EMI deal, which sat in the firm’s second and third funds.
Tabet will have his work cut out for him, as limited partners have expressed doubts about the firm’s ability to raise a future fund after the EMI disaster. Sources have said the firm’s future will be determined by how successfully it can invest remaining capital in the €5.4 billion third fund.
A Lebanese national, Tabet spent 14 years at Citigroup in London before leaving the bank in 2009 to attempt to raise his own fund, according to press reports. Prior to working for Citigroup, Tabet was a mergers and acquisitions banker for Lazard Freres and a trader at Republic National Bank of New York.