When Man Palms introduced he was stepping down as chair of Terra Firma final yr, one of many UK’s most tenacious dealmakers indicated he was beginning a brand new, more-benevolent chapter. “Man desires to alter the main target of his life,” the personal fairness agency mentioned of its founder’s plans to dedicate himself to philanthropy. Whereas nonetheless controlling Terra Firma-backed companies, akin to property group Annington and McDonald’s eating places within the Nordics, Palms recognized variety, inclusion and psychological well being initiatives as his charitable goals.
Within the mid-Nineteen Nineties, Hands kick-started the UK personal fairness increase, changing into a billionaire and one of many nation’s most influential financiers. However his repute was later bruised by enterprise failures, pricey authorized feuds and caustic public recriminations.
Simply final week, the UK’s Ministry of Defence paid Annington £6bn to take again hundreds of army houses, after years of authorized wrangling. For Terra Firma, the deal seems like a win. For the federal government and taxpayer, it was “one of many worst-ever” offers, according to the UK defence secretary.
Palms’ retirement announcement final yr was consistent with a renovation of his repute that had begun a number of years earlier. In his 2021 memoir, The Dealmaker: Classes from a Life in Non-public Fairness, Palms vowed to reform each his private habits and “philosophy of enterprise”. His goal, he wrote, would change into “to go away the world a greater place”.
One instance was Mansfield Faculty at Oxford college, to which he and his spouse donated tens of millions of kilos through the years. This largesse supplied the funds for The Palms Constructing, a glass and stone construction combining pupil housing and the college’s human rights institute. The annual Palms Lecture, which takes place there, welcomed audio system together with Sir Bob Geldof and Lord William Hague, an in depth pal of Palms, who’s now Oxford’s chancellor.
However two dozen former staff and enterprise associates described a unique aspect of Palms to the Monetary Occasions. The people, who labored for Terra Firma between 2002 and 2023, variously accused him of screaming and raging at employees, humiliating underlings and repeatedly telling sexually specific tales at work. The FT has additionally seen WhatsApp exchanges, dated from 2019 to 2023, between staff during which they talk about Palms “pushing us all to the sting”. In a single, a girl says she is “scared to be alone” with him, after he decreased her to tears.
Former staff spoke to the FT on the situation of anonymity for worry of reprisal. Many mentioned they felt Palms’ current positioning as a philanthropist and mental-health advocate was hypocritical, given the best way he handled them. “Folks know they’re signing up for lengthy hours, laborious work and no boundaries,” mentioned one former worker. “Nobody indicators up for bullying and intercourse speak.”
One junior worker, who left Terra Firma in 2020, mentioned Palms instructed her privately that he beloved studying about sadomasochism. “He was speaking about how he’d actually suggest Story of O, that Fifty Shades of Gray was basically actually newbie, introductory stuff. It wasn’t hardcore sufficient for him,” she mentioned. Story of O is a 1954 erotic novel a couple of feminine photographer who’s educated to be a intercourse slave by her lover.
The accusations make Palms the latest high-profile UK figure to be accused of failing to reform their office behaviour. “There was this tradition for 25 years within the Metropolis of individuals like that, they usually’ve simply gotten away with it,” mentioned one former senior male colleague of Palms. “His story is among the trade.”
This yr, the Monetary Conduct Authority, the Metropolis’s regulator, launched efforts to enhance how complaints of bullying and different non-financial misconduct are handled. Since October, all UK firms have a legal obligation to anticipate and forestall sexual harassment within the office.
Terra Firma is now run by Palms’ son, Richard, whom staff mentioned was well-liked and had a notably completely different administration type. An announcement supplied by the corporate learn: “We’ve at all times regarded the wellbeing of our folks as our prime precedence. To be clear, there isn’t a place for bullying, intimidation or inappropriate conduct of any form at Terra Firma and there by no means has been.”
It added that Terra Firma had “sturdy processes and whistleblowing mechanisms in place” and that “problems with this nature have and can at all times be handled significantly and confidentially, and our folks have been made conscious of the way to escalate them.” The corporate maintains that its HR operate labored properly and that it was by no means notified in regards to the allegations in opposition to Palms referred to on this article.
When allegations have been put to them for remark previous to publication, attorneys for each Terra Firma and Palms mentioned that “this story under no circumstances displays the tradition of Terra Firma now or previously”.
In his memoir, Palms described a tough childhood. He was dyslexic and dyspraxic, he wrote, making him a goal for bullies and for corporal punishment at college. He additionally recounted being sexually abused by his piano trainer.
After attending Oxford, Palms ultimately landed on the London outpost of Nomura in 1994. The Japanese financial institution welcomed his thought to imitate US companies, utilizing low cost debt to purchase European companies with untapped potential. By 2002, a string of successes satisfied Palms to go it alone. “I [wanted] to create a private equity agency to rival — and surpass — the best of the US giants,” he wrote about founding Terra Firma.
In London, potential Terra Firma recruits have been put via a rigorous course of to show themselves: a string of interviews, numerical and verbal reasoning assessments, and psychometric evaluation. Those that made the reduce discovered themselves on the coronary heart of the personal fairness increase. “It was intense . . . thrilling, mental, egalitarian,” mentioned one former senior director who labored there within the early years.
However Palms was a taskmaster with a mood, and he anticipated employees to match his work ethic. It was “hazard cash”, the identical particular person recalled. “You might be paid for the hours you retain, for the powerful speak . . . He was not a tyrant however was undoubtedly autocratic.”
In keeping with staff, Palms was unpredictable: “charming and charismatic” at one second, “harsh [and] domineering” the following. Seemingly minor incidents might set off him. “There was a tradition of worry and trepidation round Man, notably round what sort of temper he’d be in,” a former human assets director mentioned.
A number of former staff likened Palms’ conduct to that of an impulsive baby. “He’s like slightly boy who desires to show himself,” one mentioned. That usually manifested in sexually inappropriate tales and specific feedback. “Folks can be fairly horrified, ladies would undoubtedly be offended,” a senior male former colleague mentioned. “He used to suppose it was amusing. It wasn’t.”
At different occasions, employees mentioned, Palms raged. “There have been most likely numerous conferences the place he internally simply misplaced it,” mentioned a unique former senior director, who labored at Terra Firma for a decade. “A billionaire shouting at a 22-year-old analyst who has simply come from college about how silly that particular person is.”
Former staff who spoke to the FT mentioned they felt they didn’t have recourse to Terra Firma human assets. “The concept of someone coming to the human assets director eager to make a criticism about Man was inconceivable,” the previous HR director mentioned. “He dominated all people with a rod of metal.”
There have been upsides to Palms’ idiosyncratic management. Workers have been picked from various backgrounds and juniors have been uncovered to high-level decision-making remarkable at different personal fairness companies. Past profitable pay packages, staff mentioned Palms could possibly be personable and mentoring. “There have been cases when he actually made folks really feel like household and supported them,” one other former director mentioned.
In a press release to the FT, Palms mentioned he “based Terra Firma on the precept that each one voices can be heard. I deny ever having been a bully, a tyrant or behaving inappropriately, however on this atmosphere there have been occasions when tempers have been misplaced, voices raised and feedback made that some might have discovered tactless or ill-chosen. I apologise to anybody who felt upset or offended by how I spoke or reacted previously. I perceive that my drive to construct a profitable firm and take my workforce with me typically meant I spoke harshly, for which I’m very sorry.”
Palms’ representatives denied that he had a bent to speak about intercourse or books about intercourse. They mentioned he can’t exclude the chance that he instructed jokes that will have appeared inappropriate however that he by no means supposed to make folks really feel uncomfortable.
By early 2007, Terra Firma was closing its third fund, which might in the end complete €5.4bn. That was the yr the agency acquired document label EMI for £4bn. A music buff whose autobiography options lyrics as epigraphs to every chapter, Palms quickly discovered he had misgivings in regards to the deal. Traces from Eric Carmen’s plaintive ballad “All By Myself” preface pages in his memoir about EMI.
Terra Firma struggled to service EMI’s debt, and Palms got here to imagine that lender Citigroup had tricked him into the deal. He filed a pricey lawsuit, which he ultimately misplaced. In 2011, Terra Firma was pressured handy management of EMI to the financial institution. Palms’ buyers misplaced £1.5bn.
One former Terra Firma director instructed the FT that Palms was as soon as “as influential as” Stephen Schwarzman and Leon Black, the founders of US personal fairness giants Blackstone Group and Apollo World Administration, “however in the end EMI meant that he shall be remembered for very completely different causes”.
The loss was compounded by Palms’ private life. By then, he had moved to Guernsey, a tax haven within the Channel Islands, to publicly protest in opposition to the Labour authorities’s fiscal coverage. However his spouse and 4 kids stayed behind, a separation Palms later described as “emotionally very powerful”.
For a few years after the transfer, in response to his attorneys, Palms didn’t journey to London. However staff made frequent journeys to work out of Terra Firma’s Guernsey outpost or went on abroad journeys with Palms. Typically, they have been required to work out of his house on the island. “Even when he wasn’t there,” one particular person recalled, “the choices all went via him”.
A number of expressed sympathy for his or her former boss’s private circumstances. Palms’ anger, some employees mentioned, typically adopted moments of vulnerability. When he was candid about his troubled childhood, these he opened as much as might discover themselves in his crosshairs. “He was nearly so scared of his personal emotions that he would then go on a rage,” one of many former staff mentioned. “As if . . . he needed to put you in your home.”
After the publication of Palms’ memoir and articles during which he described his mental-health struggles, some employees “simply couldn’t imagine it”, as one particular person put it. “How might he discuss being bullied when he was such a bully?” One other enterprise affiliate added: “In a approach, I really feel he [was] having a dialog about what he wish to be like,” referring to Palms’ advocacy.
Within the e book, Palms wrote about making an attempt to engineer a Terra Firma comeback, following the EMI debacle. However promising offers upset, and the corporate struggled to boost cash. Palms admitted that, by 2019, “the rebirth of the agency hadn’t labored . . . I might lastly withstand the truth that I used to be by no means going to be Stephen Schwarzman.”
In 2020, Palms, a frequent op-ed author, based Have interaction Britain, a charity supposed to scale back political polarisation. “By and huge what I noticed was a person who was doing his greatest, who did in the end care in regards to the individuals who labored on the agency,” an worker who labored intently with Palms round this time mentioned. “Somebody who . . . was making an attempt to have a look at how they might use their place for some good.”
However former staff mentioned altering mores in Metropolis workplaces over current years appeared to cross Palms by. The problem was not company-wide, staff famous. “This shock went via the Metropolis . . . there was an actual cleanse,” mentioned a former Terra Firma funding director. “[But] it didn’t get via to him that issues have been altering and also you couldn’t behave that approach any extra.”
One particular person, who mentioned they left Terra Firma partly due to Palms’ outbursts and sexual feedback, mentioned Palms as soon as instructed a narrative at a piece offsite a couple of enterprise affiliate masturbating within the tub. “I’m simply him pondering, ‘what the fuck’?” they mentioned. A number of former staff mentioned he made feedback in regards to the measurement of girls’s breasts. “Man over-sexualised every thing,” added one other staffer who labored intently with Palms and left not too long ago. At work dinners, she mentioned “the dialog would at all times revolve round intercourse . . . folks’s kinks”.
A former senior colleague added: “He instructed us as soon as a couple of story when he joined [a City trading floor] and analysts needed to lie on the bottom and the secretaries must take their knickers off and stroll over them.” Two different staff mentioned Palms had instructed them an identical story. Palms’ consultant disputed particulars of this anecdote and mentioned he had used it for instance how the tradition of the Metropolis had modified for the higher. (Among the staff disputed this characterisation.)
The girl who left in 2020 alleged that, on one event after a piece dinner in London, she was so distressed by Palms’ behaviour she referred to as a relative on her approach house. She mentioned his inappropriate feedback and overly acquainted method have been “terrible”. One other time, throughout an abroad enterprise journey in 2019, Palms insisted on strolling her again to her resort room after dinner. She mentioned he then hung round her room door, standing uncomfortably near her. Afterwards, in misery, she referred to as the identical relative.
The girl, who mentioned she ended up taking a number of months off work after leaving Terra Firma because of stress from Palms’ bullying, mentioned she was talking out now as a result of she discovered Palms’ advocacy “galling” and needed him to be accountable: “I’m not a shrinking wallflower, and what occurred wasn’t OK.”
She and a number of other others commented that, apart from Palms, Terra Firma was an gratifying place to work. “For those who eliminated him, yeah, completely that poisonous stuff would all go,” mentioned a former senior director. “The office tradition was really excellent,” mentioned the previous HR director. “However there was at all times this spectre of, when Dad’s house, all people went to their room and hides beneath their beds.”
