Now we know what Charles Tate has been doing during his time off. The private equity pro, who helped to build Dallas-based Hicks, Muse, Tate & Furst into the nation’s largest buyout shop, is forming a new private equity firm, called Capital Royalty.
Tate is seeking to raise a $300 million fund for his new Houston-based firm. The fund should close sometime in the middle part of next year, he says.
The fund will focus on the pharmaceutical and biotechnology industries, buying royalties that pharmaceutical companies pay to entrepreneurs or organizations that develop new drugs or technology. For example, if a researcher is receives a royalty for a drug licensed to a pharmaceutical company, Capital Royalty will offer cash in exchange for all future royalty payments.
Tate is working alongside Jim Webster, who serves the new firm as managing partner. Webster had previously been president of Toronto-based Drug Royalty, which operates a similar fund in this sector.
The concept for Tate’s new firm was hatched during a year-long hiatus after he retired in June 2002 from Hicks, Muse. Tate at the time said he wanted to devote time to civic duties, and he did indeed serve on committees at Anderson Cancer Center as well as the Council on Science and Biotechnology. Tate says his new fund came about from his interest in medicine.