Fund Closes: Hicks Muse Closes Euro Fund, Nears Cookie Close –

Hicks, Muse, Tate & Furst announced last month the final closing on its European Fund, which rounded up a total of 1.5 billion ($1.46 billion).

Hicks Muse Europe Private Equity Fund LP, had an original target of 1.3 billion, and is designated for investments exclusively in Western European companies. Hicks Muse already has approximately 675 million of capital committed cumulatively in eight transactions in Europe. Most recently Hicks Muse agreed to buy U.K. cookie manufacturer, United Biscuit Plc ending a three-month bidding competition.

Helix Associates, a London-based placement firm, was used to draw in non-U.S. investors. “A third of the capital for this fund came from European and other non-U.S. investors – that’s the highest percentage we’ve ever had,” said Dan Blanks, a partner at Hicks Muse. “We are very pleased with that because it means that there are a lot of people on the ground who know the European marketplace and environment very well, who have accepted the fact that we know what we’re doing there.”

Hicks Muse, based in Dallas, is currently assembling a European strategy board but so far has only announced its chairman, former Canadian Prime Minister Brian Mulroney (BUYOUTS, March 21, p. 3).

The firm has already made some noteworthy acquisitions in the branded foods, media and manufacturing industries including Hillsdown Holdings Plc, a U.K. food manufacturer, The Glass’s Group, a U.K. provider of automotive information, Media Capital, a Portuguese media company, and Mumm and Perrier-Jouet champagne houses.

Hicks Muse’s most recent European acquisition will be United Biscuit, the world’s fourth largest cookie manufacturer. Should the deal close, as expected, it will be worth $2.5 billion. The purchase of United Biscuit signals a departure from Hicks Muse’s typical strategy with U.S. investments. “These public to privates are unusual for us, and we will certainly do some more of them in Europe whereas we hardly ever do one in the U.S.,” said Blanks. “We very seldom do that sort of thing unless we have a strategic advantage. Our earlier investment in Hillsdown gave us a number of synergies, which allowed us to prevail.”

Since the acquisition of United Biscuit, the cookie company has agreed to sell Polish cookie maker, ZPC San to the world’s largest cookie maker Danone SA.

With the Europe fund nearly committed at final closing, Hicks Muse’s Europe Fund II is likely not far off and attracting non-U.S. investors is a priority. Hicks Muse has had more than ten years of experience with investors in the U.S. to build a solid reputation. In Europe the firm has had only three to four years of experience with institutional investors and is just now developing a strong reputation. However, after the success of their debut fund the firm should attract even more attention from non-U.S. investors in the next round of fund raising.

“Although we have a history of rapid deployment of capital [in the U.S.], . . . I think European investors in particular may be intrigued at the thought that they could look at half the investments that were going to be made on their behalf [with Hicks Muse Europe Private Equity Fund L.P.], before they put in their capital if they came into the final closing,” said Blanks.

Hicks Muse closed its Equity Partners Fund IV L.P. at $4.1 billion in February and is currently raising a Fund V which the firm will cap at $3 billion. Hicks Muse is also planning to raise $750 million for a second Latin America fund and at least $1.5 billion for a New Economy Fund, which will invest primarily in Internet-related companies.

“We have had such a successful investment program so far that I think everyone acknowledges that we are very strong in the sectors and areas where we traditionally have had strengths, and those happen to be in Europe very much like the ones we pursued in the U.S. and Latin America,” said Blanks. “Though it’s a different geography it is very familiar territory.”