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HM Capital Partners
HM Capital Partners
HM Capital Partners
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HM Capital Partners was a private equity firm in the United States that specialized in leveraged buyouts. The firm was previously known as Hicks, Muse, Tate & Furst. It was founded in 1989 by Tom Hicks and John Muse as Hicks, Muse & Co. and was changed in 1994 to reflect the roles of Charles Tate and Jack Furst.

Key Information

History

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Hicks & Haas

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The son of a Texas radio station owner, Tom Hicks became interested in leveraged buyouts as a member of First National Bank's venture capital group. Hicks and Robert Haas formed Hicks & Haas in 1984; the next year that firm bought Hicks Communications, a radio outfit run by Hicks' brother Steven. (This would be the first of several media companies bought or created by the buyout firm that involved Steven Hicks.)

Hicks & Haas' biggest coup was its mid-1980s acquisition of several soft drink makers, including Dr Pepper and 7 Up. The firm took Dr Pepper/7 Up public just 18 months after merging the two companies. In all, Hicks & Haas turned an $88 million investment funding into $1.3 billion. The pair split up in 1989; Hicks wanted to raise a large pool to invest, but Haas preferred to work deal by deal.[1] Robert Haas went on to form Haas Wheat & Partners a middle market private equity firm based in Dallas.[2]

Hicks, Muse, Tate & Furst (HMTF)

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Hicks, Muse, Tate & Furst logo prior to the change of the firm's name in 2006

Hicks raised $250 million in 1989 and teamed with former Prudential Securities banker John Muse to form Hicks Muse. Early investments included Life Partners Group (life insurance, 1990; sold 1996). In 1991 Morgan Stanley's Charles Tate and First Boston's Jack Furst became partners.

As part of its buy-and-build strategy, Hicks Muse bought DuPont's connector systems unit in 1993, renamed it Berg Electronics, added six more companies to it, and doubled its earnings before selling it in 1998. Not every acquisition was successful for Hicks Muse. Less-than-successful purchases included bankrupt brewer G. Heileman Brewing Company of La Crosse, Wisconsin, bought in 1994 and sold two years later for an almost $100 million loss.

The buyout firm's Chancellor Media radio company went public in 1996. That year Hicks Muse gained entry into Latin America with its purchases of cash-starved Mexican companies, including Seguros Commercial America, one of the country's largest insurers. That year it also brought International Home Foods (Jiffy Pop, Chef Boyardee) into the Hicks Muse fold.

In 1997 Chancellor and Evergreen Media merged to form Chancellor Media (renamed AMFM in 1999). The next year Hicks Muse continued buying US and Latin American media companies, as well as a few oddities (a UK software maker, a Danish seed company, and US direct-seller Home Interiors and Gifts). Hicks Muse and Kohlberg Kravis Roberts merged their cinema operations to form the US's largest theater chain, Regal Cinemas. Regal filed for bankruptcy protection in 2001. The company that year also moved into the depressed energy field (Triton Energy) and formed a $1.5 billion European fund. They also invested $400 million into Teligent, Inc., a fixed wireless telecommunications carrier. Teligent filed for bankruptcy in 2001 and is now defunct.

Acquisitions in 1999 included UK food group Hillsdown Holdings, one-third of Mexican flour maker Grupo Minsa, and (just in time for millennial celebrations) popular champagne brands Mumm and Perrier-Jouët (it quadrupled its investment when it sold the champagne houses in late 2000). Lured by low stock prices on real estate investment trusts (REITs), the company agreed to buy Walden (formerly Walden Residential Properties) that year.

Hicks Muse, along with UK-based Apax Partners, bought British Telecom's yellow page directory business Yell Group for roughly $3.5 billion, making it the largest non-corporate LBO in European history. Yell subsequently acquired US directories publisher McLeodUSA for about $600 million, and floated in 2003.

Hicks Muse acquired Nestlé's Ambient Food Business in 2002, which added well-known UK brands Crosse & Blackwell, Branston Pickle, Chivers (marmalade), Sun-Pat (peanut butter), Gale's (honey), Sarson's (vinegar) and Rowntree's (jelly) to the Premier Foods stable. Cereal maker Weetabix Limited and Unilever's cast-offs Ambrosia (creamed rice and puddings) and Brown & Polson, rounded out Premier Foods' portfolio in 2003.

Acquisitions in 2004 included Kerns Oil & Gas (renamed Blackbrush Energy -- natural gas production), Persona (Canadian cable television company), Regency Gas Services (gas processing and distribution), and Centennial Puerto Rico Cable TV (Puerto Rican cable television company). It also agreed to buy a majority stake in trendy luxury shoemaker Jimmy Choo.[3] Disposals during the year included the company's remaining stake in Yell and its stake in Premier Foods.

In May 2005, Sturm Foods was acquired by HM Capital Partners. Located in Manawa, Wisconsin, Sturm Foods specializes in the manufacturing of bulk goods such as oatmeal and markets several sugar-free products under private labels.

HM Capital and Successors

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Hicks Muse struggled in the years immediately following the bursting of the internet and telecom bubbles was often cited with Forstmann Little as the highest profile private equity casualties, having invested heavily in technology and telecommunications companies.[4] The firm's reputation and market position were both damaged by the loss of over $1 billion from minority investments in six telecommunications and 13 Internet companies at the peak of the 1990s stock market bubble as well as several traditional buyouts that ended in bankruptcy (e.g., Regal Cinemas, Viasystems Group, International Wire.[5][6][7]

Tom Hicks resigned from Hicks Muse at the end of 2004 and was replaced at the helm by co-founder John Muse. Hicks would go on to found Hicks Holdings LLC. Charles Tate resigned from Hicks Muse in 2002.[8]

In January 2005, the company's European arm, separated from Hicks Muse to form Lion Capital LLP, which has since raised over $4 billion across two private equity funds.

In March 2006, Hicks Muse Tate & Furst changed its name to HM Capital reflecting the departure of Tom Hicks and the new group of partners heading the firm.[9] HM Capital appears to be overcoming initial obstacles, raising new capital from institutional investors for a $1 billion private equity fund, its first in more than five years.[10]

In 2013, HM Capital began dissolving. The energy group spun out as Tailwater Capital and the food group spun off as Kainos Capital.[11][12]

References

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HM Capital Partners

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HM Capital Partners LLC was a Dallas-based founded in 2006 by former partners of the prominent firm Hicks, Muse, Tate & Furst, specializing in control investments and in mid-market companies across sectors including , media, , and . The firm managed approximately $740 million in capital commitments through its primary fund and oversaw around $570 million in legacy investments inherited from its predecessor, providing financial assistance, operational improvements, and growth strategies to portfolio companies primarily in the United States. The roots of HM Capital Partners trace back to Hicks, Muse, Tate & Furst, which was established in 1989 in as Hicks, Muse & Co. by Thomas O. Hicks and John M. Muse, a venture focused on aggressive buyouts and consolidations in media, , and consumer industries. The firm renamed itself Hicks, Muse, Tate & Furst in 1994 to incorporate partners Charles Tate and Jack Furst, and by the early 2000s, it had raised multiple funds totaling billions of dollars, executing high-profile deals such as the acquisition of British cereal maker for £642 million in 2004 and investments in Canadian cable operations. Following the retirement of key figures like in 2005 and the departure of several partners, the firm underwent a generational transition, leading to the 2006 rebranding as HM Capital Partners to reflect its evolved structure and focus on managing existing assets rather than raising new large-scale funds. In 2008, it closed a $780 million fund targeting middle-market and opportunities. The firm began dissolving in 2013, spinning out its energy and food investment groups as Tailwater Capital and Capital, respectively, and became inactive, with its last recorded exits occurring around 2018.

Company Overview

Founding and Evolution

HM Capital Partners traces its origins to 1984, when Thomas O. Hicks and Robert Haas established Hicks & Haas in , , as a specializing in leveraged buyouts within consumer sectors, starting with an initial capital of $250,000. The firm quickly gained prominence through acquisitions in industries like soft drinks and , leveraging debt to acquire and restructure underperforming companies. Headquartered in , Hicks & Haas operated from this base throughout its evolution, expanding its footprint globally by establishing offices in key international markets. In 1989, following a partnership split, Hicks restructured the firm as Hicks, Muse & Co., incorporating John Muse as a key partner to pursue larger-scale leveraged buyouts. The entity continued to grow, and by 1994, it adopted the name Hicks Muse Tate & Furst to reflect the addition of partners Charles Tate and Jack Furst, broadening its focus while maintaining the core leveraged buyout model. During this period, the firm expanded internationally, opening offices in London for European operations and Buenos Aires for Latin American ventures, enabling cross-border deals in media and consumer products. The firm underwent another rebranding in 2006, becoming HM Capital Partners to signify a shift toward sector-specific investments under new leadership after the departure of founding partners. Over its history, HM Capital Partners and its predecessors raised multiple funds with total commitments exceeding $5 billion, including major vehicles like the $4.1 billion Hicks Muse Tate & Furst Equity Fund IV in 1999. The firm dissolved in 2013 amid challenges in the landscape, winding down operations after deploying capital across its portfolio.

Investment Strategy and Focus Areas

HM Capital Partners pursued a control-oriented strategy, primarily targeting middle-market companies in the media, and beverage, and sectors with investments typically ranging from $50 million to over $1 billion. The firm focused on cash-generative businesses possessing strong competitive positions and significant value creation potential through strategic acquisitions. Central to its approach was leveraging deep sector expertise to acquire, transform, and build portfolio companies via operational enhancements, international growth initiatives, and consolidation within fragmented industries, frequently involving public-to-private transactions or distressed restructurings. This "buy and build" aimed to drive long-term value by addressing inefficiencies and expanding market presence. Fundraising efforts began modestly with an initial $250 million vehicle raised in 1989 under its predecessor entity, evolving to larger pools such as the $1.55 billion Hicks Muse Tate & Furst Equity Fund V closed in 2002 and the $785 million HM Capital Partners Sector Performance Fund finalized in 2008. The strategy's high-leverage profile yielded successes like the profitable merger of and Seven-Up bottling operations but also exposed the firm to risks, including substantial losses from telecom sector bankruptcies amid the early downturn. The philosophy shifted from a predominantly U.S.-centric focus in its formative years to incorporating global opportunities by the , exemplified by the launch of a €1.5 billion European fund in 2000.

Historical Development

Hicks & Haas Period (1984–1989)

Hicks & Haas was established in 1984 by O. Hicks and Robert B. Haas as a Dallas-based firm specializing in management-led leveraged buyouts, starting with an initial capital of $250,000. The partnership focused primarily on opportunities in the consumer products sector, particularly non-cola soft drinks, leveraging limited funds through debt financing to execute acquisitions. Operating from , the firm targeted undervalued assets with strong management potential, emphasizing a "buy and build" strategy to consolidate and enhance operational efficiency. The firm's most pivotal transaction occurred in 1986, when it orchestrated the acquisitions of the Company for $416 million and The Seven-Up Company for $245 million in separate deals, utilizing mechanics to minimize equity outlay. These purchases, which included brands and regional bottling operations in Dallas, Fort Worth, Waco, and , positioned Hicks & Haas as a major player in the U.S. soft drink industry, creating the third-largest entity within 90 days. In 1988, the partners merged and Seven-Up to form Companies, Inc., transforming an initial $88 million equity investment into a $1.3 billion exit through a sale to Prudential Insurance, yielding a $650 million gain and an average 15-to-1 for investors. By 1989, strategic differences emerged between Hicks and Haas, particularly over Hicks' desire to adopt a structure for raising larger investment pools, which Haas opposed. This led to the dissolution of the , with operations winding down to focus solely on existing portfolio companies like the holdings. Hicks departed to co-found Hicks, Muse & Co. with John R. Muse, while Haas established Haas & Partners, Inc., marking the end of their collaborative venture after five years of $4 billion in total acquisitions.

Hicks, Muse & Co. (1989–1994)

In 1989, following the amicable split from their prior partnership at Hicks & Haas, Tom Hicks and John Muse founded Hicks, Muse & Co. as a dedicated private equity firm focused on leveraged buyouts in the U.S. mid-market. The new entity built on the consumer products expertise gained during the Hicks & Haas era, emphasizing operational improvements in undervalued companies. Hicks served as chairman, while Muse, a former Prudential Securities banker, handled deal sourcing and execution. That year, the firm raised $270 million for its debut fund, marking an early commitment to institutional limited partners for mid-sized transactions. The firm's initial investments targeted sectors like and , with its first deal in April 1990 involving a $24 million stake in Group, a life insurance underwriter, alongside partners including . In 1991, Hicks, Muse acquired First Southwest Company, a Dallas-based firm, in partnership with its management team, integrating it into the firm's portfolio and renaming it Southwest Securities. Entry into media investments began in 1993 with the formation of Chancellor Broadcasting Corporation, an initial foray into radio stations that exemplified the firm's strategy of acquiring and consolidating fragmented assets. By 1993, Hicks, Muse had closed its second fund at $800 million, reflecting strong investor confidence and expanding its capacity for larger deals. This growth elevated to approximately $500 million by 1994, maintaining a sharp emphasis on U.S. mid-market buyouts across consumer, media, and services sectors. During this period, Jack Furst, a former executive, was named a partner in 1989, followed by Charles Tate from in 1991, bolstering the team's deal-making capabilities. The addition of Tate and Furst as full partners culminated in a 1994 name change to Hicks, Muse, Tate & Furst, signaling the firm's maturation and collaborative structure ahead of broader expansion.

Hicks Muse Tate & Furst Era (1994–2006)

In 1994, the firm rebranded as Hicks, Muse, & Furst Incorporated to incorporate the contributions of partners Charles Tate and Jack Furst, who had joined earlier to bolster its capabilities in media and communications. This period marked the beginning of the firm's most aggressive expansion, leveraging its expertise in "buy-and-build" strategies to consolidate fragmented industries, particularly . The rebranding aligned with a surge in deal activity, as the firm pursued larger-scale acquisitions amid a favorable environment for in the mid-1990s. The era saw substantial capital raises that fueled growth. In 1997, Hicks, Muse, Tate & Furst closed its third equity fund at approximately $1 billion, enabling investments in high-growth media assets. By 2001, amid market volatility, the firm successfully raised $2.5 billion for its fourth equity fund, down from an initial target of $4.5 billion due to emerging economic pressures, but still one of the largest funds at the time. These funds supported a core approach focused on media, where the firm acquired undervalued companies and integrated them for operational synergies and scale. Key expansions highlighted the firm's international ambitions. In 1996, portfolio company Chancellor Media, built from an initial $48 million investment by Hicks, Muse, Tate & Furst, went public, delivering substantial returns as the initial stake grew to nearly $1 billion by 1998 through subsequent acquisitions and an IPO that capitalized on the radio consolidation boom. The firm also ventured into , forming a $500 million in 1997 with Venezuelan conglomerate Cisneros Group to target media opportunities, including pay-TV and publishing assets across the region. In 1998, Hicks, Muse, Tate & Furst opened a office to pursue European deals, coinciding with plans for a dedicated $1.5 billion Europe-focused fund amid the continent's . Major deals underscored the firm's media dominance. In 1998, Hicks, Muse, Tate & Furst partnered with Kohlberg Kravis Roberts to acquire for $1.2 billion in equity, part of a broader $3 billion transaction that merged it with and Act III Theatres to create the world's largest cinema chain at the time. In 2001, the firm, alongside , acquired Yell Group—the directory business—from for approximately $3 billion, marking a significant entry into European consumer services and leveraging the asset's established market position for expansion into online directories. However, the period was not without challenges, particularly as the 2001 dot-com bust eroded telecom investments. Hicks, Muse, Tate & Furst had committed over $1 billion across several ventures in 1999–2000, including a $200 million stake in Teligent, which filed for in 2001 after failing to sustain its fixed wireless network amid market downturns. Similarly, investments in contributed to significant write-downs, as the company restructured debt and entered proceedings, wiping out much of the firm's exposure in the sector and prompting a strategic pivot away from high-risk tech plays. By 2005, these pressures culminated in the independence of the European arm, which spun out as Lion Capital to operate autonomously, reflecting a broader amid reduced U.S. fund-raising .

HM Capital Partners Phase (2006–2013)

Following the retirement of co-founder in January 2005, Hicks, Muse, Tate & Furst rebranded as HM Capital Partners in 2006 to signal a new leadership era. As part of this transition, the firm promoted Edward Herring, Lindberg, and Downie to partner roles, emphasizing continuity in its sector expertise while adapting to a post-founder structure. In 2007, HM Capital launched the Sector Performance Fund, its first dedicated vehicle under the new name, with a target size of $1 billion for middle-market investments in , media, and sectors. The fund closed in July 2008 at $780 million after securing commitments from institutional investors, enabling a series of platform acquisitions despite emerging economic turbulence. The period saw continued deployment of capital into targeted sectors, including food sector buys that built on the firm's historical strengths and energy deals navigated amid extreme oil price swings—from a peak of over $140 per barrel in mid-2008 to a sharp decline later that year. A notable investment was the acquisition of TriDimension Energy, a Dallas-based and gas company, marking one of the fund's early platform deals. By 2010, amid the , HM Capital concentrated on U.S. mid-market opportunities to capitalize on distressed assets and lower valuations in its core sectors, though overall fundraising slowed significantly. This restraint in new fund activity, coupled with sector-specific challenges, culminated in reduced operations and the firm's gradual wind-down by 2013.

Key Investments and Portfolio

Media and Communications Deals

During the 1990s, Hicks, Muse, Tate & Furst pursued an aggressive expansion in broadcasting, leveraging the deregulation of the to consolidate radio assets. The firm acquired SFX Broadcasting in 1997 for $2.1 billion through its Capstar unit, enabling the development of SFX Entertainment into a dominant concert promotion entity that was sold to Clear Channel Communications in 2000 for $4.4 billion, including assumed debt. Similarly, starting with a $48 million commitment in 1994, the firm built through 16 acquisitions, creating one of the largest U.S. radio groups; this culminated in Chancellor's 1998 merger with Capstar to form AMFM Inc., which was acquired by Clear Channel in 1999 for $23.5 billion. In cinema and directory publishing, the firm targeted established platforms for leveraged growth. Partnering with Kohlberg Kravis Roberts & Co., Hicks Muse completed a $1.65 billion of in 1998, the second-largest U.S. theater chain at the time, which reemerged via IPO in 2002 as Group, raising $342 million. In publishing, Hicks Muse and acquired Yell Group, British Telecom's yellow pages business, in 2001 for approximately $3 billion in cash and loan notes, later taking it public in 2003 on the London Stock Exchange. Telecommunications investments marked notable setbacks amid the dot-com bust. In 2000, Hicks Muse invested $200 million in broadband provider Teligent alongside , but the company filed for Chapter 11 bankruptcy in 2001 after accumulating $1.65 billion in debt. Likewise, a $250 million (PIPE) in in June 2001 contributed to the firm's broader $1.3 billion telecom exposure; XO entered Chapter 11 reorganization in October 2002 amid heavy debt and market downturns. Latin American ventures extended the firm's media consolidation strategy beyond and . In late 1997, Hicks Muse formed Ibero-American Media Partners with Venezuela's Cisneros Group, committing up to $500 million over three years for investments in , pay TV, and related assets across the region, including radio and television stations in countries like as part of ongoing acquisitions.

Consumer Products and Food Investments

HM Capital Partners, through its predecessor firms Hicks & Haas and Hicks, Muse, Tate & Furst, established early roots in the consumer products sector with high-profile investments in the beverage industry. In 1986, Hicks & Haas acquired Dr Pepper Company for $416 million and the U.S. operations of Seven-Up from Philip Morris for $240 million, followed by the acquisition of additional soft drink brands like A&W and Squirt. These moves culminated in the 1988 merger of Dr Pepper and Seven-Up into Dr Pepper/Seven Up Companies, Inc., creating a major player in the carbonated soft drinks market with combined annual sales exceeding $1 billion. The firm exited the investment in 1993 through an initial public offering, generating a reported 1,200% internal rate of return and a $1.3 billion valuation for the combined entity, which highlighted the effectiveness of their buy-and-build strategy in consolidating fragmented consumer brands. Building on this foundation, Hicks, Muse, Tate & Furst expanded into packaged foods during the late 1990s and early 2000s, emphasizing operational improvements and brand revitalization in the consumer goods space. A key example was the 1996 acquisition of International Home Foods from American Home Products for $1.3 billion, which included iconic brands such as canned pasta, Ro*Tel tomatoes, and snacks; the firm later divested non-core assets to focus on growth in shelf-stable products. In 2001, the firm formed by acquiring brands like , frozen meals, and syrups out of for $370 million, implementing cost efficiencies and enhancements to drive growth. This investment was sold to JPMorgan Partners in 2003 for $485 million, demonstrating strong returns through value creation in mature consumer food portfolios. The firm's European operations, managed through its arm before its 2005 spin-off as Lion Capital, extended this focus to international consumer deals, particularly in retail and . In 2004, Hicks, Muse, Tate & Furst acquired , the UK's leading producer, in a £642 million deal that valued the company at over $1 billion and positioned it for expanded distribution across . These investments underscored a strategic emphasis on consumer-facing brands with strong market positions, often involving cross-border consolidation to enhance scale and operational turnarounds. Sector strategy in later HM Capital Partners funds continued to prioritize such opportunities in and consumer products, aligning with evolving market dynamics.

Energy and Other Sector Ventures

Following its rebranding to HM Capital Partners in , the firm pivoted toward investments, particularly in and gas infrastructure, through the launch of its Sector Fund in 2007. This fund, which closed at $780 million in 2008, targeted middle-market opportunities in alongside and media sectors. Key investments included the 2008 acquisition of TriDimension Energy, a Dallas-based and gas exploration company formerly known as Ram Oil & Gas, for an undisclosed amount, and a 2009 stake in SunTerra Resources, a Houston-based exploration and production firm focused on the Permian Basin. These moves reflected HM Capital's strategy to capitalize on rising demand in , building on earlier sector exposure from the Hicks Muse Tate & Furst era. In addition to energy, HM Capital maintained diversified ventures in other sectors during its earlier phases. In the insurance industry, Hicks Muse & Co. acquired seven regional insurers in 1990 to form Life Partners Group Inc., a $2.2 billion asset holding company specializing in and , which was later sold in 1996. Similarly, in financial services, the firm participated in the 1991 buyout of First Southwest Co., a Dallas-based and brokerage firm, in partnership with management; this entity evolved into Southwest Securities Group Inc., expanding its operations in securities trading and underwriting. HM Capital's energy portfolio faced significant challenges from the and subsequent oil price collapse, which eroded asset values and contributed to the Sector Performance Fund's underwhelming performance, achieving only a 0.81x multiple by the end of 2011. Notable exits included the 2013 spin-out of its energy team and associated assets—such as BlackBrush Oil & Gas, TexStar Midstream Services, and SunTerra Well Services—to form Tailwater Capital, backed by a $425 million fund in a secondary transaction facilitated by Landmark Partners; this move preceded the firm's overall wind-down and transferred management of approximately $1 billion in energy holdings.

Leadership and Organization

Founders and Key Executives

Thomas O. Hicks co-founded the predecessor firm Hicks & Haas in 1984, drawing on his background in and investments after earlier roles in on and at a Dallas bank. He led the firm's high-profile acquisition of in 1986 for $416 million, which became a cornerstone of its early success in consumer products. In 1989, Hicks co-founded Hicks, Muse & Co. (later evolving into HM Capital Partners) with John Muse, serving as co-CEO until his retirement in January 2005. John R. Muse co-founded Hicks, Muse & Co. in 1989 alongside Hicks, bringing over a decade of experience, including as head of merchant banking for Prudential in the Southwest, and specialized expertise in investments that shaped the firm's early focus on media and communications deals. As the firm transitioned through its various phases, Muse served as chairman and CEO, remaining actively involved until the dissolution in 2013. Charles Tate joined Hicks, Muse & Co. as a principal in 1991, leveraging 19 years of experience in at , where he focused on deal structuring and execution. Jack D. Furst joined around the same time, having previously worked as a partner at Hicks & Haas and in at , contributing to deal sourcing and principal investments. In 1994, both were elevated to partner status, prompting the firm's renaming to Hicks, Muse, Tate & Furst to reflect their roles; Tate retired in 2002, while Furst continued as a senior adviser until at least 2008. Following the 2006 rebranding to HM Capital Partners, Edward Herring was promoted to partner, bringing focus to the firm's and consumer products investments, including leading transactions in processing such as the acquisition and subsequent sale of Swift & Company. Eric Lindberg was also elevated to partner in 2006, specializing in energy sector opportunities, notably contributing to acquisitions like SunTerra Resources in the oil extraction space.

Organizational Changes and Spin-offs

In 1998, Hicks Muse Tate & Furst established a European office in to expand its buyout activities across the continent, marking the firm's initial foray into international operations. This office operated as an affiliate, focusing on European leveraged buyouts and investments in consumer brands. By 2005, the European arm gained full independence, rebranding as Lion Capital LLP under the leadership of Lyndon Lea, who had founded the office; Lion subsequently raised over €820 million for its debut independent fund and continued as a standalone firm specializing in European consumer investments. Following the departure of co-founder in 2005, Hicks Muse Tate & Furst underwent a significant reorganization in March 2006, changing its name to HM Capital Partners LLC to reflect a new leadership structure and generational shift. As part of this restructuring, the firm promoted three executives—Edward Herring, Lindberg, and H. Downie—to partner roles, aiming to stabilize management and refocus on U.S.-based middle-market investments in sectors like and products. Between 2011 and 2013, HM Capital Partners initiated asset reallocations in preparation for spin-offs, driven by the need to divest specialized portfolios amid operational challenges. The energy investment group, led by partners like and Downie, began separating in early 2013, culminating in the formation of Tailwater Capital in May 2013; Tailwater acquired HM's legacy energy assets through a secondary transaction backed by Landmark Partners and closed a $425 million debut fund focused on U.S. upstream and energy opportunities. Similarly, the food and consumer products team, including Andrew Rosen, spun out to establish Capital in 2012, achieving a $100 million first close for its inaugural fund in September 2012 and formalizing the separation in early 2013 with initial backing from the Investment Board; Kainos targeted middle-market deals in non-discretionary food and consumer sectors. These changes significantly reduced HM Capital Partners' global footprint, eliminating its European presence after the 2005 Lion spin-off and concentrating resources on domestic U.S. operations. The spin-offs allowed specialized teams to pursue sector-specific strategies independently, while HM shifted toward winding down its remaining activities, reflecting broader fundraising constraints in a challenging post-2008 environment where the firm had not launched a new fund since its $780 million Sector Performance Fund closed in 2008.

Dissolution and Legacy

Shutdown and Asset Liquidation (2013)

In 2013, HM Capital Partners initiated its dissolution process after failing to raise a successor fund following the closure of its 2006 vintage Sector Performance Fund, which closed on $780 million in commitments in 2008. The firm's challenges were exacerbated by the lingering effects of the , which led to depressed valuations and poor performance in key sectors, including media and investments made in 2007–2008. For instance, the Sector Performance Fund underperformed, with reports indicating a negative (IRR), primarily due to an advertising downturn impacting newspaper and directory holdings such as MaineToday Media. Energy investments also underperformed amid market volatility, contributing to an overall IRR decline of approximately 20% from initial projections in affected deals. The liquidation proceeded through strategic spin-outs and portfolio transfers to return value to limited partners, including the remaining uncalled commitments from the $740 million fund. In March 2013, the energy team spun out to form Tailwater Capital, which acquired HM Capital's legacy energy portfolio with backing from Landmark Partners and raised a $425 million continuation fund focused on upstream oil and gas opportunities. Similarly, in early 2013, the food and consumer products group separated as Kainos Capital, facilitated by a $606 million transaction led by the Canada Pension Plan Investment Board to manage the existing portfolio. These exits collectively realized over $1 billion in asset transfers, enabling the orderly wind-down without full-scale auctions. No new investments were made after 2012, aligning with the firm's shift toward closure. The headquarters in , , was shuttered by mid-2013 as operations ceased, marking the end of HM Capital Partners as an active entity. The dissolution process formally commenced on June 30, 2013.

Successor Firms and Long-term Impact

Following the dissolution of HM Capital Partners in 2013, several successor firms emerged from its specialized investment teams, carrying forward sector-specific strategies and portfolios. The energy investment group spun out to form Tailwater Capital, a -based focused on and upstream opportunities in . Founded by former HM Capital partners Edward Herring, Eric Lindberg, and Jason Downie, Tailwater completed its debut fund in 2013 with $425 million in commitments through a secondary partnership with Landmark Partners, acquiring HM Capital's assets. By 2014, Tailwater closed its second fund at $650 million, exceeding its $400 million target and demonstrating rapid growth in the space. As of 2025, Tailwater has raised over $4.4 billion in total commitments since inception and continues active investments in solutions. The food and consumer products team from HM Capital similarly transitioned into Capital, established in 2012 as a spin-out led by managing partner Andrew Rosen, who had joined the predecessor firm Hicks, , & Furst in 1993. specialized in middle-market investments in U.S. food and consumer brands, aiming to enhance operational value over 3-5 years. Its inaugural fund, Capital Partners I, closed in 2013 at $475 million, surpassing the $400 million target with backing from institutional investors including the Investment Board. This was followed by a second fund in 2016 that raised $895 million at its hard cap, underscoring the enduring viability of HM Capital's consumer-focused approach. remains active in the sector as of 2025. In , the legacy of HM Capital's international operations persisted through Lion Capital, which originated as the rebranded European arm of Hicks, Muse, Tate & Furst in 2005 and continued independent consumer sector investments post-HM Capital's formation. Lion maintained a focus on global consumer brands, exemplified by its 2004 acquisition of luxury footwear company for £101 million, which it later sold in 2007 to for £185 million ($363 million), achieving a reported 2.25x . HM Capital Partners' broader influence on lay in its pioneering role in media and telecommunications leveraged buyouts during the Hicks, Muse, & Furst era, which set precedents for sector consolidation through high-profile deals like the 1999 acquisition of . This approach influenced subsequent industry practices, emphasizing operational turnarounds in fragmented markets. Overall, transactions associated with the firm and its predecessors exceeded $50 billion in value, with key exits such as the $1.1 billion sale of a stake in Triton Energy in 2001 contributing to significant returns for investors. The spin-outs not only preserved value from HM Capital's $740 million fund but also fostered specialized firms that have collectively raised over $3 billion in subsequent capital, extending the firm's impact into and consumer resilience strategies.

References

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  18. https://pitchbook.com/profiles/fund/11405-17F
  19. https://pitchbook.com/profiles/fund/11489-68F
  20. https://www.privatedebtinvestor.com/muse-first/
  21. https://www.bloomberg.com/news/articles/2002-11-12/an-lbo-giant-goes-back-to-basics
  22. https://www.newsweek.com/dumb-deals-101-151963
  23. https://www.dmagazine.com/publications/d-ceo/2013/october/business-secrets-of-a-lion-tamer/
  24. https://www.nytimes.com/1989/05/11/business/company-news-hicks-haas-founders-split.html
  25. https://www.texasmonthly.com/articles/business-thomas-o-hicks/
  26. https://www.nytimes.com/1990/03/31/business/hicks-muse-buys-7-insurers.html
  27. https://www.upi.com/Archives/1991/09/04/Dallas-group-to-buy-First-Southwest-Co/5700683956800/
  28. https://www.latimes.com/archives/la-xpm-1997-aug-26-fi-25937-story.html
  29. https://www.nytimes.com/1994/07/22/business/buyouts-in-the-heart-of-texas.html
  30. https://www.pionline.com/article/19970414/PRINT/704140745/special-report-private-equity-fund-raising-in-little-danger-of-dropping-off-in-97
  31. https://www.nytimes.com/2001/08/09/business/hicks-muse-partner-quits-rather-than-move-to-dallas.html
  32. https://www.pionline.com/article/19980323/PRINT/803230736/lbo-investors-score-big-chancellor-media-deal-turns-80-million-into-1-billion/
  33. https://variety.com/1997/biz/news/hicks-sets-500-mil-latin-fund-1116680478/
  34. https://variety.com/1998/biz/news/hicks-muse-to-invest-in-europe-with-1-5-bil-fund-1117488895/
  35. https://www.nytimes.com/1998/01/21/business/2-buyout-firms-make-deal-to-acquire-regal-cinemas.html
  36. https://www.nytimes.com/2001/05/28/business/2-buyout-firms-will-acquire-yell-of-britain.html
  37. https://www.buyoutsinsider.com/hicks-muse-takes-hits-and-keeps-moving/
  38. https://www.nytimes.com/2001/12/30/business/even-the-smartest-money-can-slip-up.html
  39. https://www.privateequityinternational.com/hicks-muse-europe-rebrands-as-lion-capital/
  40. https://dealbook.nytimes.com/2006/03/02/hicks-muse-changes-name-adds-partners/
  41. https://www.buyoutsinsider.com/canadian-pension-plan-to-spend-10b-in-secondary-market/
  42. https://www.buyoutsinsider.com/hicks-muse-legacy-firm-set-to-close-first-fund-2/
  43. https://www.privateequityinternational.com/hm-capital-to-close-fund-targeting-1bn/
  44. https://www.privateequityinternational.com/hm-capital-energy-team-spins-out/
  45. https://www.sportsbusinessjournal.com/Daily/Issues/2000/08/02/Sports-Industrialists/CLEAR-CHANNEL-CLOSES-SFX-DEAL-SILLERMAN-MOVES-ON/
  46. https://www.forbes.com/forbes/1998/0601/6111130a.html
  47. https://www.forbes.com/2001/04/23/0423faceshicks.html
  48. https://www.bizjournals.com/denver/stories/2002/05/06/daily36.html
  49. https://www.buyoutsinsider.com/hicks-apax-take-yell-from-bt-for-3-billion/
  50. https://www.latimes.com/archives/la-xpm-2001-may-28-fi-3528-story.html
  51. https://www.cnet.com/tech/tech-industry/microsoft-takes-200-million-stake-in-teligent/
  52. https://www.latimes.com/archives/la-xpm-2001-may-22-fi-942-story.html
  53. https://www.privatedebtinvestor.com/the-pipes-the-pipes-are-falling/
  54. https://www.nytimes.com/1997/12/17/business/hicks-muse-sets-latin-media-venture.html
  55. https://www.upi.com/Archives/1988/04/13/Dr-Pepper-and-Seven-Up-announce-13-billion-merger/7110576907200/
  56. https://www.fundinguniverse.com/company-histories/dr-pepper-seven-up-inc-history/
  57. https://www.wsj.com/articles/SB842016832737574000
  58. https://www.buyoutsinsider.com/hicks-muse-passes-pinnacle-to-jpmp/
  59. https://www.wsj.com/articles/SB106055262532721800
  60. https://www.privateequityinternational.com/europe-5/
  61. https://www.fnlondon.com/articles/jp-morgans-double-role-in-hicks-muse-weetabix-takeover-20031119
  62. https://www.hartenergy.com/exclusives/hm-capital-buys-former-ram-oil-9988
  63. https://www.hartenergy.com/exclusives/additional-news-10384/
  64. https://www.prnewswire.com/news-releases/tailwater-capital-spins-out-of-hm-capital-with-425-million-fund-208422241.html
  65. https://www.nytimes.com/1986/08/21/business/dr-pepper-to-be-sold-for-416-million.html
  66. https://www.nndb.com/people/286/000171770/
  67. https://www.privateequityinternational.com/hicks-muse-alters-compensation-structure/
  68. https://www.pbs.org/video/john-muse-hm-capital-partners-wygijb/
  69. https://www.bizjournals.com/dallas/stories/2002/03/04/daily32.html
  70. https://www.capitalsouthwest.com/team/jack-d-furst-2
  71. https://www.wsj.com/articles/remember-hicks-muse-theyre-back-sort-of-01586354042
  72. https://www.privateequityinternational.com/hm-capital-to-sell-meatpacking-company/
  73. https://www.privateequitywire.co.uk/hm-capital-acquires-oil-extraction-company-sunterra-resources/
  74. https://www.infrastructureinvestor.com/lion-capital-closes-on-e820m/
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  76. https://tailwatercapital.com/tailwater-capital-spins-out-of-hm-capital-with-425-million-fund/
  77. https://www.penews.com/articles/kainos-capital-holds-first-close-of-debut-fund-20120914
  78. https://www.privateequityinternational.com/hm-capital-spin-out-gets-cppib-support2/
  79. https://dpfps.org/dallas-police-pension-minutes/board-minutes-18BR0308.pdf
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  82. https://tailwatercapital.com/tailwater-royalties-announces-fund-close-over-100-million-and-initial-acquistions-of-approximately-1900-net-royalty-acres/
  83. https://www.privateequityinternational.com/kainos-closes-on-second-fund-since-spin-off/
  84. https://www.wsj.com/articles/kainos-capital-nets-895-million-for-food-and-consumer-sector-deals-1477941093
  85. https://www.privateequityinternational.com/towerbrook-ties-up-jimmy-choo-deal/
  86. https://www.crunchbase.com/organization/hm-capital
  87. https://www.buyoutsinsider.com/hicks-muse-exits-triton-for-1-1-billion/
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