Guy Hands, one of Europe’s top private equity bosses, has relinquished day-to-day control of Terra Firma Capital Partners, the private equity group he founded seven years ago, to concentrate on investments and building relations with investors.

The surprise move is likely to appease investors following a series of setbacks at Terra Firma, which earlier this month reported a €1.39bn (£1.28bn) loss for 2008 after writing down two investments.