Oak Hill closes $3.8bn Fund III

The mid-market firm, established by Robert Bass in the 1980s, secured the backing of major pension investors for its latest investment vehicle.

Oak Hill Capital is looking to take advantage of financial meltdown with $3.8 billion the firm raised for its third fund.

The fund’s original target was $4 billion with a hard cap of $5.5 billion. Oak Hill’s second fund closed on $2.5 billion in 2005.

The fund includes several first-time institutional investors to Oak Hill and many returning limited partners, according to a source with knowledge of the situation. Limited partners in the fund include the California Public Employees' Retirement System, the Kentucky Retirement System, the New Jersey Division of Investment, the Ohio School Employees’ Retirement System, the San Francisco Employees’ Retirement System and the Oregon Public Employees’ Retirement System.

The firm has made investments from the fund, including the acquisition last summer of eight television stations from media giant News Corp for about $1.1 billion. The transaction was financed by $565 million in a senior secured credit facility and $200 million in senior notes offering underwritten by Deutsche Bank, UBS, Bank of America and BNP Paribas.

Robert Bass, a US billionaire whose father was a wealthy Texas oil tycoon, founded Oak Hill as his private investment vehicle in the 1980s. In 1999, Bass launched Oak Hill’s first institutional private equity fund, raising $1.6 billion.

Oak Hill’s six industry teams invest in basic industries, technology, business and financial services, consumer, retail and distribution, healthcare and media and telecom.