Hands’ plans take shape

Guy Hands, the former head of Nomura Principal Finance Group, is reported to have at last agreed terms with the Japanese bank as to how he will operate independently.

As reported on PEO, Hands had approached Nomura management with the proposal to pursue an independent path and set up his own fund earlier this year. This was alleged to have been prompted by Nomura's reduced appetite for carrying the whole of the Principal Finance Group's investing on its own balance sheet.

The Financial Times reports today that after nine months of negotiations, Nomura has declared that it has “reached an agreement in principle” that will allow Hands’ group to work on its own.

A crucial part of the negotiations was how Hands' new business would manage the portfolio of existing investments the Principal Finance Group had made: it has been agreed that Hands and his team will continue to manage these assets in return for a fee but they will remain on Nomura's balance sheet.

It is also reported that Nomura plans to contribute 10 per cent of the total funds raised [up to E300m]. The Financial Times also says that management are planning to provide some one per cent of the fund.

Hands hopes to raise E3bn by September 2002 and has mandated Schroder Salomon Smith Barney and Merrill Lynch to be the joint placement agents. A placement memorandum is being circulated with investors this month.

Hands and 70 other staff are expected to leave Nomura at the end of March 2002. Their business will be called Terra Firma Capital Partners, and the fund will be named Terra Firma Capital Partners II.