Terra Firma, the private equity firm run by financier Guy Hands, has written off half its ?2.6bn investment in EMI.EMI accounted for the lion??s share of a ?1.37bn impairment charge in Terra Firma??s annual review, which it published on Monday. It contributed to a writedown of 45.5 per cent on the entire portfolio.
Terra Firma said its directors decided it was ??prudent? to take an impairment, which unlike a writedown must be recorded in the profit and loss statement, even though it will receive slightly lower fees as a result.
Terra Firma said the drop in the pound against the euro had hurt the valuation of its portfolio, which fell from ?7.79bn to ?4.49bn last year.
Earnings before interest, tax, depreciation and amortisation grew by 11 per cent on average across its portfolio, mainly due to strong growth at EMI, which more than doubled earnings to £195m in the last nine months of 2008.
KKR on Monday reported a 47.5 per cent writedown in the value of investments by its Amsterdam-listed vehicle for 2008.
