Terra Firma opens in Beijing

Bo Shi (pictured) will lead the European firm’s operations in China, where it is looking for M&A and outbound investment opportunities.

Guy Hands-led private equity firm Terra Firma is to establish an office in Beijing, as the firm looks to build relationships with Chinese companies and add value to a portfolio still recovering from a £1.6 billion loss on music group EMI.

The Beijing office will be headed by Bo Shi, who joined the firm in 2008 as president and was previously with Credit Suisse and Citi Bank, according to a statement. The office will be staffed initially by four investment professionals, the firm said.

In China, Terra Firma is seeking to develop relationships with local companies to help its existing portfolio businesses.

“China holds huge potential for Terra Firma and its portfolio businesses. The establishment of a China office is a testament to our confidence in the business opportunities in China and our commitment to long-term cooperation with Chinese companies,” Hands said in the statement.

Terra Firma’s China team will focus on business development opportunities for its portfolio companies, investment and M&A opportunities, and outbound investment opportunities partnering with Chinese companies.

“We look to work with Chinese partners who can benefit from our portfolio companies’ expertise in a broad array of industries in which we invest and specialise, including renewable energy, aircraft leasing and farming,” Shi said.

The firm has been gearing up for its next fundraising, which some market participants have warned could be a challenge given its losses on EMI. To aid its fundraising effort, Terra Firma brought in former Citi banker Kamal Tabet in June to head its investor relations team, filling a vacancy left by Michael Hewett’s departure at the start of the year.

The firm is reportedly expected to begin raising its fourth fund next year, targeting between €2 billion to €3 billion. Its third fund closed on €5.4 billion in May 2007.