– Hicks Muse Europe fund half invested at final close

The Hicks, Muse, Tate & Furst Europe Fund LP in late March announced its 1.5 billion ($1.4 billion) final close. However, with some 675 million of the private equity house’s maiden European vehicle already invested or committed, it seems a fair bet that pre-marketing plans for a successor fund are already well advanced. Indeed, throughout the firm’s 11-year history, Hicks Muse funds have consistently been fully deployed well inside their notional investment period – a factor which partner Dan Blanks maintains is a valuable aid to investment discipline: “Capital being scarce tends to sharpen [our] focus”.

The European vehicle brings together more than 100 LPs, a significant minority of whom are first-time investors with Hicks Muse, with around one third of the capital being raised outside the US. “This fund sees the highest level of participation from European and other non-US investors that we have ever had”, says Blanks, who adds that the firm is delighted to have secured support from European institutions of the calibre of Allianz, PGGM and SEBanken. The offering also found favour among Hicks Muse’s traditional US investors, including the state pension funds of Louisiana, Michigan and Oregon and corporate pension funds such as Daimler-Chrysler. In all, corporate and public pension schemes account for between two thirds and three quarters of the capital raised. Helix Associates acted as placement agent for Hicks, Muse, Tate & Furst Europe Fund outside the US.

Partner John Muse, who heads Hicks Muse’s European operation, says that Europe is currently an extremely exciting and attractive investment market’ offering significant opportunities at all levels’. He adds that investors in the fund “recognised that our differentiated buy-and-build investment approach can be applied effectively in the changing European corporate climate”.

The European fund, which has a particular focus on the media, industrial manufacturing, consumer branded products and service sectors, has so far committed to eight investments – Hillsdown Holdings, United Biscuits (pending) and Glass’s Group in the UK; the Mumm and Perrier Jouet champagne houses in France; Media Capital in Portugal; Temic Telefunken in Germany; and Viatel, the pan-European broadband service provider. Hicks Muse expects to add a similar number of platform investments to the portfolio before the fund reaches full investment.