Terra Firma has a clear policy on conflicts of interest, setting out controls to prevent and manage potential personal and corporate conflicts of interest, including those which may arise during the investment process. This is provided to all staff, who reaffirm their compliance with the requirements relating to the prior disclosure and approval of outside interests and personal investment dealings.
Additionally, the contractual agreements for each of Terra Firma’s funds establish the processes for preventing and managing potential conflicts, whether between Terra Firma and the Terra Firma funds, or between separate Terra Firma funds. Such conflicts may arise during the investment, ownership or exit phases. For example:
- A potential conflict of interest could arise during a co-investment, especially if such investments were made on a specific case by case basis. Terra Firma avoids such conflict by contractually prohibiting such situations.
- A second conflict which could possibly arise is fund competition. This situation is avoided by providing priority to the earlier fund, as is laid out in contractual documents.
Each fund has an Advisory Board of a selection of its investors, and funds are prohibited from entering into arrangements giving rise to potential conflicts without the approval of their Advisory Board.