HM Capital closes $780m fund

The Texan mid-market firm has closed its first fund since its evolution from the buyout shop Hicks Muse Tate & Furst.

HM Capital Partners has closed its Sector Performance Fund on $780 million (€494 million), according to a memo to limited partners obtained by PEO.

The memo thanked LPs and said the fundraising would support its “robust middle market investment effort”.

It is the firm’s sixth buyout fund, but its first since returning to the core mid-market strategies on which it was founded in 1989 as Hicks Muse Tate & Furst. The firm changed its name in 2006, roughly one year after co-founder Tom Hicks left to pursue other investment opportunities, including a SPAC which this week agreed a $3.2 billion deal.

HM Capital’s Sector Performance Fund, which targets deals in the food, media and energy sectors, has already completed six platform acquisitions in the past 11 months, with “all six platforms making excellent early progress”, the memo said.

HM Capital declined to comment.

John Muse, the firm’s chairman and its only remaining affiliated co-founder, spoke with sister publication Private Equity International in March 2005 as HM Capital was preparing to raise the fund.

At the time, he said it was likely to target “either side of a billion” and also noted that the firm has long since overcome its highly publicised dotcom-era setbacks when it dabbled in telecom deals and real estate.

“We figured out what our success formula was, we got back on it three or four years ago and we’ve been driving against it ever since then,” Muse said.

Limited partners in the Sector Performance Fund include the Los Angeles City Employees’ Retirement System, the Oklahoma Police Pension & Retirement System, the Houston Firefighters' Relief & Retirement Fund and the New Mexico State Investment Council.

The fund’s first platform acquisition of 2008 was the purchase of US oil and gas company TriDimension Energy for an undisclosed amount. HM Capital made a $50 million equity investment as part of the deal, and also agreed to double its commitment over the next three years.