King to step back from full-time Terra Firma role

The former chief executive of J Sainsbury is stepping back from his role at one of the City's most prominent buyout firms after it decided against raising its first general investment fund for a decade.

Sky News has learnt that Justin King, who was named as vice-chairman and head of portfolio businesses at Terra Firma Capital Partners in the autumn of 2015, is to relinquish responsibilities for the day-to-day management of the firm.

Mr King, who ranks among Britain's leading business figures, will retain his vice-chairman title but will become a senior adviser at Terra Firma, the private equity group founded by City financier Guy Hands.

The former Sainsbury's chief will also retain his boardroom seats at Terra Firma-backed companies including Wyevale Garden Centres and Annington, the vast residential property empire leased to the Ministry of Defence.

Investors in Terra Firma's funds were informed of the move on Monday, which private equity industry insiders said was a reflection of Mr Hands's revised ambitions for the future of his business.

Sources said the decision would allow Mr King to pursue additional business opportunities outside the Terra Firma portfolio.

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Wyevale is in the middle of an auction process which is currently focused on offloading small parcels of garden centres to other parties, while Annington is widely expected to come to the market in the next 12 months.

Mr King has also been involved in resolving the future of Four Seasons Health Care, Britain's biggest care home operator, and chairs BrighterKind, a separate portfolio of dozens of care homes that was the subject of a legal dispute and is now also up for sale.

A signatory to a letter backing The People's Vote campaign, which is endorsing a second Brexit referendum, Mr King is expected to be in demand from private and publicly owned companies for other board seats.

He won widespread plaudits for the turnaround of Sainsbury's, which he ran for a decade in which it recovered much of the ground it had lost to rivals Tesco and Asda.

He joined Terra Firma as Mr Hands sought to rebuild ties with investors in the wake of the firm's calamitous ownership of EMI, the British music company.

Despite success in terms of profit growth, the financial crisis and strained relations with Citigroup, EMI's biggest lender, meant that Terra Firma was unable to refinance its debt.

The Wall Street bank eventually seized control of EMI, sparking a bitter legal battle lasting more than five years which tarnished Mr Hands's reputation.

Terra Firma has recently focused on raising money for individual deals including the purchase of McDonald's Nordic master franchise of 435 restaurants and Welcome Hotels in Germany.

Mr Hands has been aided by handsome returns generated on earlier Terra Firma investments, including Infinis, a waste recycling business, and Tank & Rast, a German motorway concessions operator.

Terra Firma's most recent general fund, TFCP III, was closed in May 2007, raising €5.4bn.

Mr King could not be reached for comment on Monday.