LONDON (Reuters) - Private equity tycoon Guy Hands is putting 20 million pounds of his own money into his private equity fund Terra Firma TERA.UL, the Financial Times reported on Friday.
The newspaper said Hands was using about a fifth of his estimated 93 million pounds personal wealth to guarantee large bonuses to top team members in an effort to retain his best dealmakers.
It cited people close to the situation as saying Hands set aside half of the fund’s 40 million pound annual salary bill to be distributed over the next two years, as top staff have little prospect of earning “carried interest” - the profit sharing bonuses that often make up the bulk of private equity pay.
The underperforming fund was hit hard by the collapse of the EMI record label deal Hands took on at the height of the credit bubble in 2007, according to the FT.
Reporting by Stephen Mangan; Editing by Richard Pullin