Terra Firma Capital Partners confirmed today that Matthias Moser, a German national and former financial managing director focusing on the German market, has left the firm, which is led by London-based financier Guy Hands.
Moser, an investment banker who joined Hands’ operation two years ago after working for Deutsche Bank, declined to comment.
On gardening leave until the end of the year, Moser is understood to be joining Eurohypo AG, the German mortgage lender and property investor that was created in 2002 and which is controlled by Deutsche Bank, Commerzbank and Allianz Group.
The departure comes shortly after Jennifer Dunstan, also a financial managing director and another senior figure at Terra Firma’s 70-strong team, left the firm for what the firm described as personal reasons. Earlier this year, Mark Tagliaferri also quit. Peter Middleton, an operational managing director, resigned 18 months ago, shortly after Terra Firma had gained independence from Nomura International, the Japanese bank.
A spokesman for Terra Firma said the firm did not expect any other resignations among its senior executives. Investors in Terra Firma Capital Partners II, the first fund the firm has organised since spinning out of Nomura, have been notified of Moser’s exit, he said.
The fund recently held an interim closing on E1.7bn. Originally aiming to raise E3bn, the fund’s overall target was scaled back to E2bn earlier this year. A final close is scheduled for January 2004.
Moser’s exit, described by a source familiar with the situation as “the most disappointing” of the recent resignations, leaves Terra Firma’s German coverage without a senior financial specialist. David Pascall, an operating partner based in Frankfurt, is currently the most senior member of the company’s German team.
Moser’s return to a role in banking suggests that part of his motivation may have been financial. Terra Firma’s managing directors receive a base salary of £110k and a share of the fund’s profits, but no annual bonus. As a result, a significant portion of the firm’s professionals compensation is deferred, a standard arrangement for private equity but a concept that investment bankers are not accustomed to.
According to Terra Firma’s spokesperson, the terms and conditions governing Terra Firma Capital Partners II do not include a provision relating to the potential exit of managing directors. Only in the event of Guy Hands leaving the group would a key-man clause be triggered, which would free investors in the fund from their financial commitments towards it.
Alongside the UK, Germany is one of two European markets that Terra Firma concentrates on. In February, the firm came close to acquiring a portfolio of publicly owned residential real estate in Cologne, a E1.9bn transaction which ultimately failed following infighting at the portfolio’s controlling shareholder, the City of Cologne.
Terra Firma’s remaining team of managing directors is made up of Charles Ewald, Quentin Stewart and Finlay MacFadyen, who have financial expertise, as well as Martin Angle, Mike Kinski, Joe Sinyon and Stephen Alexander, all of whom serve as operational executives. Guy Hands is CEO.
Negotiations with suitable candidates to replace Moser are understood to be currently underway.
Moser's new employer EuroHypo is reported to be one of a consortium of lending banks supporting a E543m bid for listed Swedish property firm Tornet led by Lehman Brothers Real Estate Partners and Ratos.