Tom Hicks is known to most for recently trading baseball’s best and most highly paid player to the New York Yankees, and then swallowing a good deal of A-Rod’s salary in the process.
To the private equity community, Hicks is known as a legendary professional who popularized the “buy-and-build” model of leveraged buyout investing.
Rather than keeping up this contradiction in business acumen, Hicks is hoping that everyone will know him just as a savvy sports owner with a resume that happens to list more than 30 years in private equity. The 59-year-old last week announced he will retire as chairman of Dallas-based Hicks, Muse, Tate & Furst at the end of March 2005, at which point he will turn his full attention to his sports franchises and real estate development company, Southwest Sports Realty.
“I had always kind of assumed that 65 was the age to retire at, but I really was thinking in terms of funds,” Hicks tells PE Week. The firm is currently investing Fund V, and Hicks says he assumed he’d stay through Fund VI, which will be raised next year.
“But last spring I began thinking that I might not want to do that,” Hicks says.
The change in heart is largely family-related, says Hicks, pointing out that he has a chance to spend more time with his oldest child, who has begun to work alongside him on the Texas Rangers baseball franchise and Dallas Stars hockey team. Hicks also hopes that a few of his six other children will follow suit and join him in the front office.
“As I approach my 60th birthday, I have found it increasingly difficult to find enough time to be with family; to pursue with them our shared interest,” says Hicks, who adds that he’d like to help his children get established professionally as investors and owners in their own right.
Hicks co-founded Hicks, Muse, Tate & Furst 15 years ago with John Muse, after having served as president of First Dallas Capital Corp. between 1974 and 1977. Hicks previously worked as an investment officer in the venture capital affiliate of Guaranty Trust Co. in New York.
Since Muse and Hicks partnered, the firm has completed about 400 transactions, including notable deals for Dr. Pepper/Seven Up, Yell Group and AMFM Communications, which later would be merged into Clear Channel.
The firm currently is investing HMTF Fund V, a $1.6 billion vehicle that was raised in 2000, and the firm is in the midst of raising a second European fund. Hicks says he will participate in Fund VI next year as a limited partner, although he does not expect the target to be anywhere near the $5 billion and $6 billion recently raised by buyout shops Texas Pacific Group and The Blackstone Group.
“The buyout market clearly has bifurcated a bit, and we’ve shifted to the middle and upper-middle market,” Hicks explains. “We looked back at the deals we’ve had the most success with, and that’s where we find them. We can’t be all things to all people.”
Muse will succeed Hicks as chairman. Muse and Jack Furst will remain as part of the three-person management committee. Lyndon Lea – who joined the firm six years ago and heads up its growing European activities – will fill the remaining spot. Lea will not have his name added to the firm name.