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Terra Firma's first acquisition as an independent fund falls through10/02/2003. Source: AltAssets. 
 Terra Firma, Guy Hands' new pan-European private equity firm, has suffered a major setback with the collapse of its first big deal as an independent fund.
The City of Cologne has blocked Terra Firma's acquisition of shares in housing companies GAG Immobilien and Grund und Boden (GruBo), after two members of the council's ruling party, the Christian Democratic Union, voted against it.
Guy Hands followed a similar strategy at Nomura International when he bought 64,000 flats from the Bundeseisenbahnvermögen in February 2001 for around E2.1bn.
Despite the veto, a spokesman for Terra Firma said that the firm was still strongly committed to the German market, as it believed there were a lot of opportunities there.
The firm is currently recruiting two managing directors for the German office and three investment executives, taking its manpower in Germany up to 13.
Interest remains firmly fixed on Terra Firma, especially in light of its current fundraising efforts. The firm announced a first close in November last year at E1bn and expects to hold a second close in the next few months.
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