After Just Five Months, Oak Hill Reels In A $1.2B First Closing –

Oak Hill Capital Partners, the buyout group founded by private equity mogul Robert Bass, took only five months to round up $1.277 billion for its fund’s first close late last month.

The firm’s debut fund should hold a final close on a total of $1.55 billion on March 31, according to Jay Crandall, a partner at Oak Hill and long-time Bass associate.

The fund launched in October with a target of $1.25 billion (BUYOUTS Oct. 12, 1998, p. 1). Mr. Bass and the four Oak Hill partners are contributing $400 million to the fund. At the time of the launch, a source close to the fund raising said the firm would have a broad-based investment approach.

Mr. Crandall declined to name limited partners who signed on for the first close. But William Quinn, president of AMR Corp., the investment arm of American Airlines, confirmed that his pension had committed $50 million to the fund.

Mr. Quinn said AMR was attracted by the large amount of the managers’ personal wealth going into the fund. “There is the intention to make money, not just fees,” he said. “We want our partners’ interests and ours to be alligned. [The fund] was a soft sell.”

AMR has not invested with any Robert Bass vehicle before, he said.

When the fund was launched, a source close to the fund raising said Oak Hill would look to raise capital from L.P.s who had not previously invested with Mr. Bass.

Although he declined to name other L.P.s, Mr. Quinn said the Oak Hill fund had as investors a number of private pensions and endowments, and very little public pension money.

Mr. Quinn said privious vehicles of Mr. Bass had generated gross returns north of 30%.

The fund marks a comeback of sorts for Mr. Bass, who decided in 1995 to disolve Arcadia Partners, a $1.8 billion mezzanine fund launched in 1987, and to step back from the buyout industry.

Oak Hill is based in Menlo Park, Calif., and New York City. The firm’s management includes Mr. Crandall; Dan Doctoroff, who has been with Mr. Bass since 1987; Steven Gruber, with Mr. Bass since 1990; and Mark Wolfson, who dates back to 1994.

Merrill Lynch & Co. is assisting the firm with the its fund raising.

Mr. Bass currently has two other private equity vehicles, neither of which allocate much to buyouts. The $1.4 billion Oak Hill Strategic Partners, L.P. mostly invests in public markets, but sets aside $280 million for private equity deals. Oak Hill Securities Fund, L.P., at $1.7 billion, provides high-yield financing, and may provide debt for some of the new fund’s investments, a source said.