Global private equity firm, Hicks, Muse, Tate & Furst has closed its fifth US buyout fund at $1.6 billion, a long way off its original target amount of $4.5 billion. The Dallas-based firm managed a first close a year ago at $1.2 billion, but has been struggling to secure commitments in tough fund raising times.
Signs of troubles at Hicks, Muse surfaced in 2000 when it offered what amounted to an unprecedented 20 per cent guaranteed return to investors on its new fund being raised. It was understood this followed on the heels of the emergence of a number of troubled technology investments in the previous fund. That fund, which closed at the end of 1998, had raised $4.1 billion in just over a year.
In response to these problems, last summer the group refocused its business activities with the Dallas and London offices assuming more of a pivotal role, while the New York and Buenos Aires divisions have become satellite offices.
The firm has also been scaling back its activities in the Latin American region, following a dampened institutional enthusiasm for its most recent fund, Latin America Fund II, which had an original target of $200 million. The firm ceased fund raising at $125 million and has decided to de-emphasise activity in the region.