The Pioneer
The frontier and an appetite for the unknown, goes first.
Guy Hands emerges in this interview as a Pioneer whose career is defined by seeing structural possibility where others see only disorder. He consistently entered industries in flux, from rolling stock privatisation to pub estates to music distribution, and reframed their fundamental economics before competitors recognised the opportunity.
“But just talk me through a little bit of that transition. What happened was in 89, we had a credit crunch. This one was caused by the Japanese and the Japanese market just sort of collapsed and it took years and years to come back. And they'd been a large buyer of bonds.”
“So the press basically, the view was this was a typical Japanese bid completely out of kilter with any form of reality. Within three months, we'd securitized the debt cash flows, which were effectively leasing flows for 725. And we still had 100% of the equity. At that point, the headlines were great train robbery.”
“Whereas if we're just the only people doing it, you don't really move the valuations up. We like it to have a reasonably large amount of asset value so that if things go wrong and we can't make the change, at least we've got something we can sell at the end and not lose too much money or any money.”
“They came fifth at the Norriton table, which is in the top five in the university out of about 34 colleges. And then 94% state school and have a greater percentage of students from household incomes under 15,000 than the national average and a greater percentage of ethnic minority students.”
Money Maze Podcast: “Private Equity and Leveraged Buyouts: A Discussion with Guy Hands, CEO of Terra Firma”
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