Hicks Muse legacy firm set to close first fund

HM Capital Partners expects to close its Sector Performance Fund by the end of the month, according to sources familiar with the fund-raising effort. The firm is targeting the firm at between $1 billion and $1.5 billion.

Limited partners include the Los Angeles City Employees Retirement System, which committed $10 million, and the New Mexico State Investment Council, which committed $30 million, according to press reports.

Officials at HM Capital declined to comment.

The fund marks a symbolic feat for the mid-market firm, which has a nearly 20-year legacy dating back to its previous incarnation as Hicks Muse Tate & Furst Inc.

The fund is the firm’s first vehicle since it renamed itself HM Capital in 2006 to reflect a generational change after adding three new partners, Edward Herring, Jason Downie and Eric Lindberg. The Dallas-based buyout shop manages $3.7 billion in assets and invests in the energy, food and media industries.

John Muse, chairman of the firm, and Tom Hicks, who left in 2005 and now runs his own investment firm, co-founded the LBO shop in 1989 as Hicks Muse & Co. It added Jack Furst, now a senior adviser to the firm, and Charles Tate, who retired in 2002, to the shingle in 1994.

In the 1990s, the firm was one of the biggest players in the LBO business, but a series of bad bets in the telecommunications industry diminished the performance of its earlier funds.

The most recent name change was also intended to avoid confusion with Hicks’ investment firm, Hicks Holdings, which holds a number of notable investments in real estate and sports teams, including the Liverpool Football Club & Athletic Grounds and the Texas Rangers major league baseball team.

HM Capital has made five acquisitions via the Sector Performance Fund. It recently acquired Tri-Dimension Energy, a Dallas-based oil exploration company, and in July it acquired Phone Directories Co., an Orem, Utah-based telephone book publisher.