The man behind private equity firm Terra Firma said on Wednesday that the pipeline for deal flows is "huge," after committing 1 billion euros ($1.14 billion) of capital to new investments.
"Going back to 2011, 2012, nobody was really selling anything because everybody was sitting at a loss or indeed a wipe-out," Terra Firma Founder and Chairman Guy Hands told CNBC at private equity conference SuperReturn in Berlin.
"Now people can sells things and maybe make a small profit so the deal flow, the pipeline is huge," he added. "The question is sorting through that pipeline to find those things that can get earnings coming back to where they were in 2007, maybe higher."
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The private equity market in Europe saw a surge in deal activity in the fourth quarter of last year, according to research firm FactSet Research Systems. It found that deal volume in the private equity market rose 4.5 percent in the fourth quarter from the previous three months, with 605 deals recorded.
Terra Firma, one of Europe's biggest private equity firms, has been fighting to win back investor support after losing £1.75 billion ($2.72 billion) in equity from a £4.5-billion buyout of music label EMI Group in 2007.
It said recently it would change its approach to investing and spend 1 billion euros ($1.14 billion) of its own capital on future deals, with a focus on entrepreneurial firms.
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The private equity firm plans to invest its own capital alongside direct contributions from investors. This contrasts with the traditional private equity strategy of raising pools of cash before identifying buyout targets.
According to the firm, it has returned six billion euros to its investors over the last three years.
Asked which parts of Europe the private equity firm would be focusing its attention on, Hands said it not about which countries provided the best opportunities, but finding good companies across the region.
"Investing in a good company in bad country is far more likely to be more successful than investing in a bad company in a good country. So I have no problem looking at Spain, Portugal Greece, Italy – it is about finding the good companies," Hands said.
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With regards to Greece, however, he was less optimistic, despite markets getting a boost this week after Athens secured an extension of its bailout program with fellow euro zone countries.
"I am very unconfident about Greece. The reality is that Greece will and needs to exit the euro. I think that would be good for the euro and the Greeks," Hands said. "I think Greece will have a tough few years but will come out a much more proud and successful nation than it is today."
