Terra Firma Rejected Two 2019 Deals Over ESG Concerns, Guy Hands Says

The video discusses a capital raising strategy focused on a deal-by-deal approach, allowing for selectivity and reduced capital requirements. ESG concerns significantly influence investment decisions, with half of potential deals rejected due to reputational risks. The economic implications of ignoring ESG are highlighted, emphasizing the potential for reduced business value over time. The investment process involves weekly meetings to evaluate deals, with a strong focus on ESG criteria.

What is one advantage of raising capital on a deal-by-deal basis?

• It requires a large amount of upfront capital.

• It allows for more selective investment choices.

• It mandates investing in multiple deals simultaneously.

• It reduces the need for investor approval.

Why were half of the potential deals not pursued?

• They required too much capital.

• They did not meet ESG criteria.

• They were outside the firm's expertise.

• They were not profitable enough.

What happens to businesses that do not align with ESG criteria over time?

• They are unaffected by ESG considerations.

• They become more valuable.

• They may become less desirable and sell for less.

• They are sold at a higher multiple.

How does ESG influence the firm's investment decisions?

• It is ignored if the deal is profitable.

• It is a key factor, leading to rejection of many deals.

• It is a minor factor in decision-making.

• It is considered only for large deals.

What percentage of deals are rejected due to reputational reasons?

• 75%

• 50%

• 10%

• 25%