Guy Hands, the venture capitalist behind EMI, conceded yesterday that his controversial purchase of the record company behind The Beatles and Coldplay had taken an unexpected emotional and physical toll.

The Terra Firma boss, who had specialised in buying low-profile businesses, is surprised by the media interest and emotion surrounding the music industry - although he insisted his turnaround plan for EMI was on track. Mr Hands, speaking at a venture capital conference in Munich, said: “Strategically and financially we are 100 per cent there but emotionally and physically it has been harder than we thought.”

It is the first time he has admitted that he underestimated the task of rescuing the company he bought.

Terra Firma bought EMI for £2.1 billion last year and since then Mr Hands has fought to stave off an artists revolt amid a massive restructuring that will cost 2,000 jobs. Robbie Williams's manager said earlier this year that the solo singer does not want to record a new album, while Sir Mick Jagger wants to switch The Rolling Stones to the rival Universal.

Mr Hands said the restructuring would be over by June and results would come through “virtually immediately”. There are signs that relations have improved. A Coldplay album is due in May, scotching fears that the company's top-selling act was reluctant to record, and EMI believes Williams will return after taking a break.

Mr Hands said most of EMI's problems had been caused by its artists and repertoire executives, who are responsible for signing new acts, having too much power.

In one example, Mr Hands said EMI had spent five times as much money marketing a new CD than the company had received in gross sales from the album. “And they continued to do it for three years. That is what amazes me,” he said, declining to name it. “We told [the artist] you could stick a £50 note on the cover of a CD and have the same effect, and we also wouldn't have to pay them. Those sorts of comments don't go down too well.”

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